Download A Comparative Analysis of Drug Lag in Emerging Markets

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
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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.
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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).
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200
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150
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No. of drugs
Average lag (yrs)
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100
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2
50
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0
1999
2001
2003
2005
2007
2009
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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
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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
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Anti-infective
Cardiovascular
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Nervous
Average lag (yrs)
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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
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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.
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Drug lag (yrs)
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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
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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
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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
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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.
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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.
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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.
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