India Compliance Best Practice Overview

The Eighth International Pharmaceutical Compliance Congress took place in Dubai, UAE from May 5-7. The conference featured many useful programs and impressive speakers that highlighted how compliance is an increasingly global challenge. The Organization of Pharmaceutical Producers of India (OPPI), an association of research and innovation driven pharmaceutical companies, offered insight into the compliance landscape in India.

OPPI’s Mission

Pariachay Mittal, Director of Compliance and Business Integrity of OPPI’s Working Group on Ethics and Compliance, first noted that the United States and much of Europe has highly developed compliance regulations and are “looking only to improve.” However, while India is not just starting out, the country “is still learning” and taking the experience from “our Western colleagues,” Mittal states.

The OPPI was formed in 1965, and currently has 47 members. They focus on innovation, ethical marketing, and adherence to good manufacturing practices.

Mittal stated that intellectual property protection is of upmost important for India right now. Many of OPPI’s members are research based companies, and the organization believes in strong IP rights. In light of India’s reputation, this seems like a good stance. Last year, Forbes ran an article on India’s “War on Intellectual Property Rights” that noted India “comes in dead last in terms of protecting intellectual property rights, according to Global Intellectual Property Center.”

The article pointed out that India issues “compulsory licenses,” which allow competing firms to pay a fee and make generics of drugs that should still be protected by patents. The patent holder has no say. “Patents ensure that these drugs can be invented in the first place,” Forbes contributor Sally Pipes notes. “On average, it takes 10 to 15 years and $1 billion to develop one new drug…Without the period of exclusive sales that patents guarantee, pharmaceutical firms would not have enough time to recoup their ten-figure investments,” states Pipes. “And if drug-makers cannot attract the investment they need to seed their research operations, innovation will grind to a halt.”

In addition to IP protection, Mittal states that OPPI’s objectives include increasing access to healthcare. OPPI partners with stakeholders to enable physical reach, quality, and affordability to put patient need as the highest priority.

OPPI also focuses on Ethics and Compliance. Mittal notes that India is in the midst of reinventing itself and is committed to high ethical standards and compliance. India has not developed a full compliance program yet, but Mittal reiterated that they are learning from other countries’ best practices.

Overview of India’s Marketplace

A broad overview of India helps to understand why the country has developed particular practices.

India has a population of 1.2 billion. The massive population and historical fragmentation touches many aspects of the country’s economy. The pharmaceutical industry is no exception. When India gained its independence from British rulers, Mittal states that there were 565 small dynasties. “We work hard to get them into ‘one India,'” he states.

Furthermore, there are areas of immense poverty within India, and often individuals in a given locality are not getting basic necessities. Compliance officers will have to tell a medical representative in areas where there is no power, for example, that they must be compliant about medical policies. The proper priorities in this situation could be difficult to juggle.

Fifty percent of India’s 1.2 billion people are below the age of 30. India’s “young vibrant population” is helping to transform India. Mittal notes a shift in the way the population responds to education, which he believes will be beneficial in the changing healthcare compliance environment.

Mittal states that education in India has historically been “you listen to me” and “I’m telling you this is the right thing.” The Indian workforce is very instruction-oriented. “This has made it tough for compliance officers,” Mittal notes, “because people do not like to ask questions.” Now, however, young people are “ready to learn new rules of the game.”

From an investment perspective, the country’s GDP per capita has gone up every year. There is a burgeoning middle class (41 percent of the population by 2025 compared to 14 percent today). The middle class churns the business, Mittal states. In purchasing power parity, India is now third on the worldwide list.

India is the world’s largest democracy. Mittal notes that the country is multi-cultural, they value free speech, and have a “fiercely independent media.” Mittal also spoke to the recent agitation over anti-corruption in recent years. India has seen demonstrations by “anxious crowds in the middle of the night in all weather” to make sure India passes laws which will cover the corruption.

Indian Pharmaceutical Industry

Mittal provided a number of important points about the pharmaceutical industry. :

• The Pharmaceutical industry in India is expected to continue the strong growth momentum with a compounded annual growth rate of 12-14%.
• India has the most FDA approved manufacturing plants outside of the USA (more than 175). Mittal stated that Indian companies have been involved in a number of high profile manufacturing incidents. He believes, however, that these were isolated incidents specific to certain companies, not a country-wide problem.
• India is the third largest pharmaceutical market by volume, but revenue is not that high. India is a highly fragmented and price sensitive market with over 56,000 brands and 10,000 companies fighting for pieces of the same pie.
• Multinational Corporation’s share is only approximately 28 percent of the market, while local Indian companies control 72 percent. Compliance personnel often have to manage sales teams who argue that this is not a fair competition. For example, a local company can give healthcare professionals cars or vacation tickets, but OPPI’s colleagues are bound by very strict compliance rules.
• 75 percent of healthcare costs are coming out of patients’ own pockets. Mittal notes that “insurance is still a dream.” Thus, in India, when companies charge for a particular medicine, price is important because consumers front the bill. “India is a very price sensitive market,” Mittal stressed. “If something is going for 2 or 3 rupees less, [consumers] will go for that.”
• Generics: Mittal notes that doctors will prescribe medicine based on the patients’ requirement, but the doctor will go to the nearest pharmacy and ask if they have a cheaper substitute. Pharmacists can make substitutions right at the counter. Future legislation is in the works where doctors would not even be allowed to write a company brand name on the prescription, only the chemical compound. So pharmacies have an important role in the drug distribution, as they can do the substitution easily. “If companies have a good relationship with pharmacists,” Mittal says, their products will be very profitable.
• India has more than 750,000 chemists (Retailers and wholesalers)
• Patient education is vital in India. For many treatable illnesses, a large portion of the population is simply unaware that medicine exists.
• Expectations: Society expectation and sensitiveness to business integrity are very high for patients.

Compliance in India

Recently, stringent regulatory rules have been introduced in India: the Medical Council of India (MCI) Code in 2010, and the OPPI Code of Pharmaceutical Practices in 2012, based on the International Federal of Pharmaceutical Manufacturers and Associations (IFPMA) Code. The OPPI Code covers interactions with healthcare professionals, associations of healthcare professionals, medical institutions and patient organizations, and the promotion of pharmaceutical products. OPPI notes that “[w]here direct promotion to the public is allowed, this is covered by local laws, regulations and/or relevant codes of practice. Member companies should, of course, comply with these local laws, regulations and/or codes.”

Mittal notes that the MCI Code initially was not enforced very well in 2010. “Enforcement is still a challenge,” he says. The OPPI works as a platform for industry to have dialogue with the government and other regulatory bodies to create a level playing field among multinationals companies and Indian players.

OPPI also focuses on addressing concerns and violations of the OPPI Code reported by the member companies as per operating procedures set by the code.

In 2012, they created a specific OPPI Working Group on Ethics and Compliance. This past year they created several groups tasked with specific agendas. The first group will work on editing and revising the OPPI Code.

The second group is going to work with MCI and other regulators to get everyone on the same page regarding compliance. Nothing is more confusing for companies than divergent rules and regulations, so this coordination effort is very important.

The third group will work on frequently asked questions regarding the code. For example, the OPPI Code says no “gifts” are allowed for doctors. “Gifts,” however” are not defined in the Act. Clearly, the word “gift” is interpreted differently by almost everyone and a definition is essential for enforceable compliance programs. “For some, even ten rupees spend, which is less than 20 cents, is a gift,” Mittal notes. To further complicate matters, Mittal says, India is a gift giving culture. Thus, clear policies are required for compliance.

The fourth group will work on whitepapers regarding compliance.

Compliance Best Practices

Mittal provided the following slide as an outline to a successful compliance program:

Mittal also focused on five areas within a risk-based approach to compliance: awareness, third party relationships, healthcare professional relationships, anti-bribery and corruption laws, and complaint management.