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A Comparative Analysis of Drug Lag in Emerging Markets By Vaibhav Sivaramakrishan and Mahesh Bhide “Drug lag” is the delay in introduction of a new drug into a country. The concept of drug lag was first brought up by William Wardell, a pharmacologist at the University of Rochester School of Medicine. After living in New Zealand and the UK for several years, Wardell realized that several drugs being sold abroad were not available in the US. Wardell published a study showing that from 1962 to 1971, the UK introduced more new chemical entities (NCEs) and at a faster rate than the US. [1] Subsequently, studies on drug lag expanded their geographic focus. During the late 1970s several papers were published on the drug lag in various countries. One study concluded that it took 1 to 2 years more for an NCE to be introduced in Sweden, France and Italy as compared to Germany and the UK. The same author also showed that France, Italy and Japan marketed NCEs that were not found in any other part of the world. [2] More recently, emerging markets have been of interest to multinational companies. The BRIC (Brazil, Russia, India, China) countries were identified as the key emerging markets by Goldman Sachs in 2001. It is intriguing that these nations have a much lower gross domestic product (GDP) per capita than the more developed G7 members, yet comparable purchasing power. [3] This indicates that even with the low standards of living in these regions, a growing middle class is encouraging investment in most industries. The pharmaceutical industry has capitalized on these findings. IMS Health reports that from 2012 to 2016, the pharmaceutical industry in Asia and Latin America is expected to grow by up to 13%, higher than the expected growth rate in North America and Europe.[4] One would expect such a high rate of growth to mean new drugs would be introduced almost immediately into these markets. However, in reality, the emerging markets are facing a drug lag issue. This article explores drug lag in India and compares it to drug introductions in a developed and another emerging market. The US was chosen as the developed market, as most drugs are introduced there first nowadays [5,6] Brazil was chosen as a regulatoryfocus.org February 2013 1 representative emerging market due to the local presence of a large number of generic manufacturers and similarities to India in its intellectual property laws. Furthermore, ease of obtaining drug approval information made these countries a feasible choice. One major difference between this analysis and others conducted in the past is that it takes into account differences in drug formulations. The emerging markets are known for the approval of various combinations of drugs not seen in the developed markets. This study is also unique in that it compares differences between two emerging markets. Methodology A list of drugs approved in India since 1999 was obtained from the Central Drugs Standard Control Organization (CDSCO) website and imported into Microsoft Excel.[7] Drugs were classified by therapeutic category to compare drug lag across categories: • antineoplastic/immunosuppressant • analgesic/anesthetic • cardiovascular • anti-infective • antihistamine • respiratory • genitourinary • ophthalmology • gastrointestinal • nervous (central and peripheral nervous system) • skeletomuscular • dermatology • endocrine • diagnostic The four areas with the most number of commonly marketed drugs were selected from this list for further analysis. Specifics are provided in the results section. Drugs were also classified based on formulation: • NME (new molecular entity) • tablet • ER tablet • dispersible tablet • capsule • ER capsule • injection/vial • inhaler • granules • eye drops • rectal • cream • gel • ointment This information was used for a qualitative analysis of the types of products released into the Indian market. Prior to early 2004, CDSCO did not specify the type of formulation and in such cases the drug was assumed to be an NME. After this period, none of the drugs in this study were assumed to be an NME, as it was difficult to be sure whether they were new drugs or just new formulations of previously approved NMEs. Dates of approval for these drugs in the US were obtained from Drugs@FDA, the database maintained by the US Food and Drug Administration (FDA). [8] The difference between when the drug was approved in the US and in India was calculated. Dates of approval for these drugs in Brazil were obtained from the online database of the Agência Nacional de Vigilância Sanitária (ANVISA). [9] Comparisons were made between India and the US, Brazil and the US, and India and Brazil. regulatoryfocus.org February 2013 2 Figure 1. Comparison of average drug lag in India per year relative to the US and total number of approvals in India in each year (1999–2012). 300 9 8 250 200 6 5 150 4 No. of drugs Average lag (yrs) 7 100 3 2 50 1 0 1999 2001 2003 2005 2007 2009 2011 0 Year Average lag Total no of drugs approved in India that year The number of drugs approved in a particular year was not only the drugs commonly approved in these countries, but instead it is the total number of drugs approved in India itself. Thus, this includes drug products that are not found in US and Brazil. The objective of doing this was to be able to determine whether the number of drugs in the approval pipeline is affecting the rate at which drugs are being approved. Thus, data was only analyzed for those drugs that are commonly found in two regions. For example, tetrabenazine was approved in India and USA, but not in Brazil and this drug was removed from all comparisons involving Brazil. Results Comparison Between an Emerging and a Developed Market: India and the US This study scanned 470 drug formulations and combinations commonly sold in India and the US. The four therapeutic categories with the most drugs, selected for a more detailed analysis, were: • antineoplastic/immunosuppressant (43) • anti-infective (85) • cardiovascular (63) • nervous (76) The analysis showed that overall drug lag reached a peak in 2011 in India with an average lag time of 7.79 years (Figure 1). However, only 82 drugs were approved that year, indicating drug lag was possibly due to delays in submissions for regulatory approval. In 2003, the situation was similar: drug lag was 7.30 years with only 58 drugs approved. The year when the largest number of drugs (262) were approved in India was 2008. However, drug lag for 2008 was still 7.01 years, suggesting it could be attributable to a delay in CDSCO approval. The number of drugs approved in India increased rapidly between 2003 and 2008, but since then has shown a downward trend. In 2011, only 82 drug products were introduced into the Indian market (Figure 1). With respect to specific therapeutic areas (Figure 2), the data show that antineoplastic, anti-infective and cardiovascular drugs had a lag greater than the overall average in 2003. This indicates other drug categories were being approved faster during this period. Anti-infective drugs reached a peak in 2010, while nervous drugs showed a maximum lag in 2009. Among all categories, antineoplastics showed the least drug lag. A potential reason for this is because of the high prices of antineoplastic drugs, foreign developers regulatoryfocus.org February 2013 3 Figure 2: Drug lag in India relative to the US in four major therapeutic areas (1999–2012). An asterisk (*) indicates that data up to September 2012 were taken into account. Antineoplastic/Immunosuppresant 16 Anti-infective Cardiovascular 14 Nervous Average lag (yrs) 12 10 8 6 4 ge ra 12 Av e 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 01 20 00 20 20 19 0 99 2 Years introduce these drugs into the Indian market as soon as possible to maximize their profits before a local manufacturer markets a cheaper, generic version of the drug. Of the four categories studied, anti-infective drugs showed the maximum average drug lag from 1999 to 2012. In seven of these 14 years, anti-infective drugs showed the highest drug lag. This is particularly surprising considering there is a diverse pool of infectious diseases that affects the Indian population. However, we looked at drug lag for products common to India and the US. There are several drug substances (amorolfin, cefetamet, etc.) and combinations (e.g., fixed dose combinations, or FDCs, containing cefixime or dicloxacillin.) that are marketed in India but not in the US. Within the anti-infective category, antiretrovirals showed interesting characteristics. In all cases, NME versions of antiretroviral drugs were introduced in the US before India. However, the era following the World Health Organization’s 2005 Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement saw the appearance of several FDCs of antiretrovirals in the Indian market. These included various combinations of stavudine, lamivudine, nevirapine, zidovudine, emtricitabine, tenofovir and efavirenz (Figure 3). Most of these combinations are marketed by local generics manufacturers, which have currently only received tentative approval for such products in the US. The number of drugs introduced in India after 2004 increased rapidly due to the change from the process patent to in the product patent regime. The TRIPS agreement led to an increase in new formulations and a decrease in NMEs. This was because local generic manufacturers were shifting their focus to producing combinations of previously approved drugs. FDCs were highly prevalent in the anti-infective, cardiovascular (mostly antihypertensives) and antidiabetic therapeutic categories after 2004. A limitation to this analysis was that until 2003 the list of drugs obtained from the CDSCO website was assumed to be only NMEs, unless otherwise specified. Lists of drugs approved after 2003 took the formulation into account. It was difficult to determine whether any of these formulations were NMEs, as lists of drugs approved prior to 1999 were unavailable. Comparison Between an Emerging and a Developed Market: Brazil and the US This part of the analysis used the same list as for the India-US comparison, but drugs not commonly sold in both Brazil and the US were eliminated. Also, drug formulations and combinations approved before 1999 in Brazil were removed. Coincidentally, this was the year that ANVISA was formed and we expect that the drug approval process subsequently regulatoryfocus.org February 2013 4 became more streamlined. The final list had 284 drugs. The four therapeutic categories with the most drugs were: • antineoplastic/immunosuppressant • anti-infective • cardiovascular • nervous system A limitation of this part of the analysis was that in some years the number of drugs was too small to make an accurate judgment of the average approval lag. Therefore, the graphs compare individual drugs approved during the period 1999–2012 in each of the four therapeutic categories instead of drawing conclusions based on annual averages. From this analysis, we found anti-infective, cardiovascular and nervous drugs all had similar average drug lags of 4.86, 4.88 and 4.86 years, respectively (data not shown). Antineoplastic/immunosuppressant drugs had a lower lag of 3.94 years on average. However, in both the cardiovascular and nervous categories, several drugs took more than 10 years to reach the market. There were also many drugs in these two categories that were introduced in Brazil before the US, therefore pulling the average drug lag down. Comparison Between Two Emerging Markets: India and Brazil This portion of the analysis again used the same list, but drug formulations and combinations not commonly sold in both India and Brazil were eliminated. Of these drugs, 331 were identified as commonly sold in India and Brazil. Again, the four therapeutic categories with the most drugs were: • antineoplastic/immunosuppressant • anti-infective • cardiovascular • nervous system Overall drug lag reached a peak in 2011, but has been on the increase since 2008 (Figure 4). This shows that even though both emerging markets introduced NMEs at a relatively similar rate, new formulations took longer to reach the Indian market. In this case also, drug lag peaked during the years with the most drug approvals in India. A negative result indicated that, on average, drugs were introduced earlier in India during a particular year. Such was the case in 1999, when India introduced drugs 1.68 years earlier than Brazil. Individual therapeutic categories also showed some interesting results (Figure 5). Antiinfective drugs showed higher drug lag than the other three categories in most years and the antineoplastic category was characterized by minimum drug lag, just as in the comparison between Brazil and the US. Anti-infective drugs are introduced in different formulations and in both India and Brazil they are mostly made by different local manufacturers. This is important to note as the presence of local companies prevents multinational companies Figure 3: Drug lag in India relative to the US for formulations and combinations of the antiretroviral drugs tenofovir and efavirenz. 5 4 Drug lag (yrs) 3 2 1 0 -1 Tenofovir Tenofovir+emtricitabine tablet Tenofovir+emtricitabine+efavirenz tablet Tenofovir+lamivudine tab Tenofovir+lamivudine+efavirenz Efavirenz Efavirenz+stavudine+lamivudine tablet Efavirenz+lamivudine+zidovudine tablet Efavirenz+tenofovir+emtricitabine tablet Efavirenz+tenofovir+lamivudine tablet -2 -3 regulatoryfocus.org February 2013 5 4 300 3 250 2 200 1 150 0 100 -1 50 -2 1999 2001 2003 2005 2007 2009 2011 No. of drugs Average lag (yrs) Figure 4: Comparison of average drug lag in India per year relative to Brazil, and total number of approvals in India in each year (1999–2012). 0 Year Average lag Total no of drugs approved in India that year from investing in drugs that would be costlier to the buyer. This indicates that Brazilian manufacturers are able to develop anti-infective formulations faster than Indian manufacturers. During most years, antineoplastic drugs reached the Indian market before Brazil. This could be due to multinational companies fearing the entry of cheaper generic versions for which compulsory licenses may be granted by CDSCO. Of the 85 anti-infective drugs commonly sold in India and the US, only 56 were approved in both India and Brazil. Five of these 56 were FDCs. This indicates that although India and Brazil have similar market structures, Brazilian manufacturers appear to be much more cautious about producing FDCs. Discussion Historically, drugs for treatment of pain and nervous disorders have taken the longest to be introduced in the emerging markets.[10] However, recently, anti-infective drugs seem to be facing a more severe drug lag in the emerging regions and showed the most lag in all comparisons in this analysis. This could be attributed to the increased interest in antiHIV drugs in both Brazil and India. This increased interest by foreign companies in India is being countered by increased investment in anti-HIV FDCs. In Brazil, ANVISA chooses not to grant patents for HIV drugs, which acts as a deterrent to new drug developers.[11] The number of drugs approved in India has consistently dropped since 2008. Local companies are making efforts to develop NMEs, as foreign developers are wary of the intellectual property laws in India. [12] Upon complying with the TRIPS agreement, local manufacturers immediately started producing new formulations of previously approved drugs. After 2008, the number of possible safe and effective drug combinations began to drop. At this stage, several local manufacturers are working on the development of NMEs. [12] In May 2012, Ranbaxy became the first Indian company to produce an NME. [13] Apart from developments on the bench side, India has recently changed its policy on foreign direct investment in the pharmaceutical industry. Foreign investments now need to be cleared first by the Foreign Investment Promotion Board (FIPB), which is going to make it harder for multinational companies to invest in Indian firms. [14] Within the next few years, India should see an increase in the number of generic drug approvals for these reasons. Drug lag can be considered a function of submission lag and approval lag. In the years when there was a high drug lag and a low number of drug approvals, the lag could be attributed to delays in marketing authorization submissions. In the years where there regulatoryfocus.org February 2013 6 Figure 5: Drug lag in India relative to Brazil in four major therapeutic areas (1999–2012). An asterisk (*) indicates that data up to September 2012 were taken into account. Antineoplastic/Immunosuppresant Anti-infective Cardiovascular Nervous 14 12 10 8 6 4 2 0 -2 -4 -6 ge ra Av e 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 19 99 -8 Years was a low drug lag and a high number of drug approvals, the lag could be due to increased time taken to approve the applications. India’s anti-infective drug sector is marred by several counterfeit products and questionable FDCs. For these reasons, several drug products approved in India are not marketed in either the US or Brazil. CDSCO has been taking actions to regulate the quality of drug products in India. [15] It has been claimed that several FDCs marketed in India do not have sufficient medical data to prove their safety. [16] This directly affects drug lag as companies willing to market legitimate drugs face competition from cheaper products that supposedly treat the same illness. Fortunately, CDSCO has been taking actions to regulate the quality of drug products in India. [Op cit 15] On the other hand, we noticed that Brazilian manufacturers do not invest much in FDC development. Most of the anti-infective products sold in Brazil also are sold in the US, although the number of manufacturers is much greater in Brazil. It has also been shown that in 2011, promotional investments in India were greater than in Brazil and this could be because multinational companies attempt to show their products are superior to counterfeit products. [17] Generic drugs are clearly defined by ANVISA, as FDA has done in the US. Generic products are differentiated from their brand counterparts in Brazil with the term “Generico” (generic) on the package. [18] However, in India, generic drugs have not yet been defined by CDSCO and do not possess any distinguishing features. They are merely substitutes for brand-name drugs, making it easier for local companies to promote them. One common feature of both countries is that generic drugs are promoted under several names, whereas in the US such products are referred to by their International Nonproprietary Name. Branding makes it easier to establish the product in the buyers’ minds as equivalent to the reference listed drug. It is important here to identify the buyers as physicians, pharmacists/chemists and insurers as they are the primary decision makers in the pharmaceutical buying process worldwide. regulatoryfocus.org February 2013 7 One of the major concerns for multinational companies is weak intellectual property laws in the emerging markets. India’s original Patent Act of 1970 was amended in 2005 to meet the TRIPS requirements. [19] This made it illegal for local manufacturers to copy drugs that held product patents after 1995. However, expensive brand-name drugs are only affordable for a minority of the population. This drives the government to approve compulsory licenses or generic versions of brand-drugs, despite the existence of valid patents. Such was the case in the widely publicized court case of Bayer vs. India for the anti-cancer drug sorafenib. [20] In Brazil, foreign manufacturers holding local patents are required to produce their drugs within political borders instead of importing them in order to be the sole player in the market. [21] Furthermore, if a drug is not commercialized within two years of a patent approval or if the patent holder abuses its economic power, compulsory licenses may be issued to local manufacturers to produce the drug. [22] Such malleable intellectual property laws create barriers to entry for foreign companies into these regions. Price caps are often placed on drugs in the emerging markets. India’s National Pharmaceutical Pricing Authority (NPPA) and Brazil’s Câmara de Regulação do Mercado de Medicamentos (CMED) regulate the prices of drugs based on national requirements and prices in other markets. [22] Other time-consuming issues in India are the requirement for local clinical development and submission of a Certificate of Pharmaceutical Product, while Brazil still requires document notarization and price certifications. [10] All these may seem like minor factors, but they act as deterrents to foreign investment in emerging markets. Even though pharmaceutical regulation in the emerging markets has improved over the years, it is vital for these countries to adapt to the regulations of more-developed markets. A possible future development could be the harmonization of BRIC market regulations, similar to the collaboration between the US, the EU and Japan to form the International Conference on Harmonisation (ICH). Currently, most multinational companies begin developing their drugs according to the ICH guidelines before “tweaking” their products to satisfy the regulatory requirements of other regions. BRIC harmonization would facilitate drug development for companies, as there would be fewer variables to modify. However, most critics of regulatory harmonization claim that vast cultural and political differences in the emerging markets will prevent this from happening. Conclusion The pharmaceutical industry in the BRIC nations is growing at a rapid rate. Even with this constant growth, there remains a drug lag in key therapeutic areas in Brazil and India. It is certainly surprising that these countries require a wide range of anti-infective medication, yet much of the therapy available in the developed regions of the world is still absent in India and Brazil. Weak intellectual property laws, drug price regulation and unclear regulatory guidelines seem to be common factors that restrict investment in these regions. It is important that these issues be tackled by both the industry and individual governments and that regulations in these regions become harmonized. References 1. Wardell WM. “Introduction of new therapeutic drugs in United States and Great Britain: an international comparison.” Clin Pharmacol Ther. 1973;14(5):773-790. 2. Andersson F. “The drug lag issue: the debate seen from an international perspective.” Int J Health Serv. 1992;22(1):53-72. 3. O’Neill J. Building Better Global Economics. Goldman Sachs website. http://www.goldmansachs.com/our-thinking/topics/ brics/brics-reports-pdfs/build-better-brics.pdf. Published November 2001. Accessed November 22, 2012. 4. Total Unaudited and Audited Global Pharmaceutical Market by Region. IMS Health website. http://www.imshealth.com/ deployedfiles/ims/Global/Content/Corporate/Press%20Room/Top-Line%20Market%20Data%20&%20Trends/2011%20 Top-line%20Market%20Data/Regional_Pharma_Market_by_Spending_2011-2016.pdf. Published May 2012. Accessed 22 November 2012. 5. Is the U.S. really slower than Europe in approving new drugs. US Food and Drug Administration. March 17, 2011. http:// www.fda.gov/AboutFDA/Transparency/Basics/ucm247464.htm. Accessed December 22, 2012. 6. Roberts SA, Allen JD, Sigal EV. Despite Criticism Of The FDA Review Process, New Cancer Drugs Reach Patients Sooner In The United States Than In Europe. Health Aff. July 2011;30(7):1375-1381. 7. List of Drugs Approved for Marketing in India. Central Drugs Standard Control Organization. website. http://cdsco.nic.in/ listofdrugapprovedmain.html. Published 2012. Accessed 1 September 2012. 8. Drugs@FDA: FDA Approved Drug Products. FDA website. http://www.accessdata.fda.gov/scripts/cder/drugsatfda/index.cfm. Published 2012. Accessed 1 September 2012. 9. Consulta de Produtos Medicamentos. Agência Nacional de Vigilância Sanitária website. http://www7.anvisa.gov.br/datavisa/consulta_produto/Medicamentos/frmConsultaMedicamentos.asp. Published 2012. Accessed 1 September 2012. 10. Wileman H, Mishra A. “Drug lag and key regulatory barriers in the emerging markets.” Perspect Clin Res. 2010;1(2):51-56. regulatoryfocus.org February 2013 8 11. Portilho D, Gosain R. “The Pharmaceutical IP Environment in Brazil.” Managing Intellectual Property website. http://www. managingip.com/Article/1450365/Brazil-Drugs-dispute-demands-action.html. Published 1 October 2007. Accessed 22 November 2012. 12. D’Souza A. “Future of Indian pharma lies beyond generics.” The Hindu. 22 April 2012. http://www.thehindu.com/business/ future-of-indian-pharma-lies-beyond-generics/article3339963.ece. Accessed 18 November 2012. 13. Singh K. “Ranbaxy to launch India’s first indigenous malaria drug at one-third the cost of current therapies.” The Economic Times. 14 April 2012. http://articles.economictimes.indiatimes.com/2012-04-14/news/31342145_1_malaria-drug-pfalciparum-malaria-combination-drugs. Accessed 23 November 2012. 14. Press Trust of India. Pharma industry unhappy with Govt decision on FDI. The Economic Times. December 4, 2012. Available at: http://articles.economictimes.indiatimes.com/2012-12-04/news/35594774_1_president-ranjit-shahani-piramal-healthcare-pharma-sector. Accessed December 27, 2012.15. List of drugs prohibited for manufacture and sale through gazette notifications under section 26a of drugs & cosmetics act 1940 by the Ministry of Health and Family Welfare. CDSCO website. http://cdsco.nic.in/html/copy%20of%201.%20d&cact121.pdf. Published 2012. Accessed 20 November 2012. 16. Gautam CS, Saha L. “Fixed dose drug combinations (FDCs): rational or irrational: a view point.” Br J Clin Pharmacol. 2008;65(5):795-796. 17. Emerging Markets Today and Tomorrow. Cegedim Relationship Management website. http://crm.cegedim.com/Docs_ Whitepaper/Industry/Emerging-Markets-Whitepaper-2012.pdf. Published 2012. Accessed 15 November 2012. 18. Lobo LM. “The Brazilian generic market.” Journal of Generic Medicines. 2009;6(4):345-349. 19. Greene W. “The Emergence of India’s Pharmaceutical Industry and Implications for the U.S. Generic Drug Market.” International Trade Commission website. http://www.usitc.gov/publications/332/working_papers/EC200705A.pdf. Published May 2007. Accessed Nov 18, 2012. 20. Bajaj V, Pollack A. “India orders Bayer to License a Patented Drug.” The New York Times. 12 March 2012. http://www. nytimes.com/2012/03/13/business/global/india-overrules-bayer-allowing-generic-drug.html. Accessed 20 November 2012. 21. ‘t Hoen E. “TRIPS, pharmaceutical patents, and access to essential medicines: a long way from Seattle to Doha.” Chic J Int Law. 2002;3(1):27-46. 22. Grubert N. “Opportunities and Threats in the BRIC Pharmaceutical Markets: Assessing the Impact of Recent Pricing, Reimbursement, and Market Access Developments.” Decision Resources Group website. 2009. Available at: http://decisionresources.com/registration/white-papers/bric-markets-white-paper. Published 2009. Accessed 21 November 2012. Authors Vaibhav Sivaramakrishan is a graduate student in pharmaceutics at the Albany College of Pharmacy and Health Sciences, specializing in emerging markets and CMC regulation. Mahesh Bhide is an adjunct professor of pharmaceutics at the Albany College of Pharmacy and Health Sciences with two years of experience in regulatory affairs. Acknowledgments This work was done as part of a graduate-level project at the college. © 2013 by the Regulatory Affairs Professionals Society. All rights reserved. regulatoryfocus.org February 2013 9