Clinical trials: No magic prescription

April marked a crucial month in healthcare, as the Supreme Court (SC) delivered its much-awaited judgment on Novartis AG’s blood cancer drug Glivec.

The apex court dismissed Swiss drug-maker Novartis’ application to patent its drug, and the judgment was this year’s show-stopper, with global ramifications for patients and the pharmaceutical industry.

In fact, litigation was the common thread this year, across developments affecting the industry – be it price control, clinical trials or patent protection. And many of these legal battles are scheduled to roll over into 2014.

Though domestic and multinational companies saw mixed fortunes at different courts in terms of rulings, the interesting feature this year was that companies fought each other.

So, domestic firm Cipla Ltd and multinational Pfizer Inc fought over liver and kidney cancer drug Sunitinib. But Merck and Co Inc and Sun Pharmaceutical Industries Ltd fought on the same side of diabetes drug Sitagliptin, with Glenmark Pharmaceuticals Ltd on the opposing side. And on breast cancer drug lapatinib, GlaxoSmithKline Plc fought fellow multinational Fresenius Kabi, a generic drugs maker. The only silver lining is that patients hopefully benefit from the outcome.

Under the watch of the SC, the Government announced its revised policy to control drug prices – bringing all 348 drugs (about 650 formulations) in the National List of Essential Medicines (NLEM) under price control.

Public health groups were, however, unhappy with the Government taking the market share, rather than the cost of production, to calculate the average at which drug prices would be capped. Finally, essential medicine prices were capped at the average of all drugs in a specific formulation with one per cent market share. But implementing the Drug Price Control Order (2013) triggered other problems.

Traders were unhappy with the revised (lower) margins that companies would pay them in line with new rules. And the industry got knotted up in re-labelling its medicines already supplied to chemist shops. And this, too, landed up in court.

While this logistic nightmare of sporting revised labels is expected to sort itself out in some months, the trade’s tug-of war with companies continues. This year saw industry players come together to address the trade-margin issue, says D.G. Shah of the Indian Pharmaceutical Alliance, a platform for large local companies.

The roll-out of the new price control regime and its allied issues inhibited performance, and industry growth slipped into single digits, touching a hopeful 9 per cent in November. And 2014 is going to be difficult for the above mentioned reasons, says Shah.

More litigation was in store at the SC, this time on testing drugs on humans.

In fact, the call for greater transparency on issues such as compensation only got louder, as uncomfortable details emerged on some clinical studies done in India, raising the question whether they were indeed put through the rigour required in clinical trials.

With the SC raising questions on the Government’s approval of 150-plus trials, January is expected to bring in some clarity on the fate of these trials. The longest shadow on domestic drug-makers was cast by regulators in the US and the UK.

India-based Ranbaxy Laboratories Ltd settled civil and criminal suits against it in the US for $500 million (around Rs 3,100 crore today), the highest by a generic drug company.

The whistle-blower in this case, former employee Dinesh Thakur, received $48 million.

Local drug-maker Wockhardt had a cascade of bad news and import bans, from the US and the UK regulators on its units in Waluj and Chikalthana in Maharashtra.

The year closes with the Government not going through with its proposed equity-cap for multinationals looking to buy into existing domestic operations.

2014 will also reveal whether the appetite for acquisitions has been satiated, or if more are in store.

jyothi.datta@thehindu.co.in