The dispute could become a tortuous legal battle, unresolved for years says Dr. Sumit Ghosal in a Business India article

1. u 46 u
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Business India u the maga zine of the cor por ate wor ldFocus
T
hose familiar Shakespeare’s
Julius Caesar would have
dubbed it the “Ides of March”
for the Indian pharmaceutical indus-
try. But according to the Central gov-
ernment gazette dated 10 March,
344 medicinal formulations repre-
senting a total sales value of almost
H3,800 crore, was on the cards for
the past several months. When it
actually became public knowledge
about a week later, the notifica-
tion predictably caused “shock and
awe” throughout the Indian pharma
industry. Stock prices of major com-
panies plunged and industry leaders
went into a tizzy.
About 20 companies have
obtained an interim stay from the
Delhi High Court and another 80 are
getting ready to follow suit. “We are
planning our own legal action as an
industry body,” says S.V. Veerramani,
national president, Indian Drug
Manufacturers Association (idma).
The government action was based
on the report of a six-member com-
mittee headed by Professor Chandra-
kant Kokate, appointed in September
2014 to look into the issue of irra-
tional medicines being sold in the
market. They examined 6,214 drug
formulations each of which com-
prised two or more pharma ingredi-
ents. These are known as Fixed Dose
Combinations or fdcs.
The Kokate Committee submit-
ted its first interim report in April
2014 in which the products exam-
ined were categorised as (A) Rational,
(B) Irrational, (C) Requiring further
deliberation and (D) Requiring sub-
mission of additional data from the
manufacturing companies. Among
all the fdcs that the Kokate Com-
mittee studied, it placed about 1,083
in category B and C, of which 344
were considered definitely irratio-
nal and an immediate ban was rec-
ommended for them. This report
was submitted to the government
on 10 February 2016. The remaining
products, placed in Category C, are
being discussed further and would
be under the scanner of the Central
Drugs Standards Control Organisa-
tion (cdsco) for some time.
Many industry watchers fear that
the government may soon impose a
similar ban on all 1,083 formulations,
which could shrink the H100,000
crore Indian pharmaceutical mar-
ket in India by as much as H12,000
crore. Besides, there are a large num-
ber of products which were initially
granted marketing permission by
the various State Licensing Authori-
ties (slas) many years ago and have
been prescribed by doctors all over
the country ever since. These are the
Category D products for which the
cdsco has now asked manufacturers
to submit fresh scientific data within
the next 18 months.
Interestingly, ims Health, the larg-
est market research agency to track
the pharma market in the coun-
try, may have underestimated the
actual impact of the current ban. Its
estimate of the sales impact of the
recent ban order is based on just 215
medicinal formulations which it has
been tracking, while another 129 are
not even on its radar! Nitin Goel,
Bad medicines
The dispute could become a tortuous legal battle,
unresolved for years

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march 28 -april 10, 2016
Business India u the maga zine of the cor por ate wor ld Focus
managing director, ims Health India,
was unavailable for comment.
Though the Kokate Committee has
listed its objection to each of the drugs
it has catesgorised as irrational, indus-
try leaders have criticised the Febru-
ary report, saying that it does not take
the industry’s viewpoint into consid-
eration. “The Indian Pharmaceutical
Alliance (ipa) neither supports ‘irra-
tional’ fixed dose combinations nor
seeks to defend them for profit. It is
committed to providing its custom-
ers with safe, effective and quality
medicines. However, it has serious
concerns about the accuracy of the
database furnished to the expert
committee; the processes followed by
the expert committee; the prima facie
violation of the terms of reference;
the relevance of the experts to the
task assigned; and the final decision
process of banning the fdcs,” says ipa
secretary general Dilip G. Shah.
“The government order to ban
344 fdcs en bloc is arbitrary and
unfair. Even though vague show
causes notices without details were
received in some cases, no oppor-
tunity for a personal hearing has
been given to any manufacturer. The
many issues raised by manufacturers
in reply to the notices have also not
been answered by the government
and it is clear that the department
has not applied its mind to the mer-
its of each case when issuing the en
bloc order barring 344 fdcs in one
go. This is also not in public interest
as lakhs of patients will be suddenly
denied essential, practically effec-
tive and proven safe drugs fdcs pre-
scribed by qualified doctors,” says a
news release from the idma.
Same language
This is possibly because the gazette
notification announcing the ban
order has listed all the 344 medicinal
formulations one by one, but used
exactly the same language in justify-
ing its action. In each case, the noti-
fication reads as follows:
S.O. 709(E).—Whereas, the Central
Government is satisfied that the use
of the drug fixed dose combination
of Paracetamol + Cetirizine + Caffeine is
likely to involve risk to human beings
whereas safer alternatives to the said
drug are available; And Whereas, the
matter has been examined by an
Expert Committee appointed by the
Central Government and the said
Expert Committee recommended
to the Central Government that the
said drug is found to have no thera-
peutic justification; And Whereas on
the basis of the recommendations of
the said Expert Committee, the Cen-
tral Government is satisfied that it
is necessary and expedient in public
interest to regulate by way of prohibi-
tion of manufacture for sale, sale and
distribution for human use of the
said drug in the country; Now, there-
fore, on the basis of the recommen-
dations of the said Expert Committee
and in exercise of powers conferred
by section 26A of the Drugs and Cos-
metics Act, 1940 (23 of 1940), the
Central Government hereby pro-
hibits the manufacture for sale, sale
and distribution for human use of
drug fixed dose combination of Par-
acetamol + Cetirizine + Caffeine with
immediate effect.”
In the remaining sections of the
288-page gazette notification, only
the chemical names of the medicines
have been changed suitably but the
language otherwise remains exactly
the same. Similarly, in the Kokate
Committee report, on which the
entire government action is based,
the column on industry responses
for each of the banned drugs is iden-
tical. It reads as follows: “The replies/
clarifications wherever available
from firms and the earlier data sub-
mitted by them were thoroughly
examined. The Committee observed
that the data submitted and the peer
reviewed scientific evidences do not
support the rationality of this fdc.
Hence the committee considered
this fdc to be irrational.”
But not everyone associated with
the pharmaceutical industry or the
medicalprofessionsupportstheindus-
try viewpoint. Tapan Ray, former
president of the Organisation of Phar-
maceutical Producers of India (oppi)
and a veteran of the pharmaceuti-
cal industry, writes in his blog (www.
tapanray.in) “In June 2013, cdsco
announced the ‘Policy guidelines for
approval of Fixed Dose Combinations
Veerramani: planning legal action

3. u 48 u
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Business India u the maga zine of the cor por ate wor ldFocus
(fdcs)’ in India. According to cdsco,
just 1,193 fdcs were approved by
the dcgi, since 1961 till November
2014. Thus, all drug manufactur-
ers should clearly know, which fdc
has been approved by the dcgi, and
when, leaving no scope for any ambi-
guity in this area. Thus, there should
be no problem in total conformance
to the above ‘fdc Policy Guidelines’
by these drug producers. In the same
year – 2013, a public notice was also,
reportedly, issued, calling all those
drug players manufacturing fdcs to
apply with the requisite fee, in the
prescribed form to the dcgi office,
providing the required details.” Only
after that was the Kokate Committee
appointed by the government. The
rest, as they say, is history.
“fdcs are a useful tool when they
prescribed and marketed judiciously,
but they should all be approved by
the dcgi after proper trials. Just
because the ingredients of an fdc
have been approved separately does
not mean the fdc can be assumed
to be safe and effective,” says Dr K.K.
Agrawal, honorary secretary general,
Indian Medical Association (ima), the
largest umbrella body of medical
practitioners all over the country.
Likewise, when eMediNexus, a
healthcare information and advocacy
Website conducted an impromptu
survey of 4,892 clinical specialists
from different parts of India last
week, it was revealed that as many
as 64 per cent of the respondents
agreed with the government action!
Further, approximately 52 per cent
of doctors said their own reputa-
tions (in their patients’ view) would
not be affected at all by the govern-
ment action, and about 64.6 per cent
said they did not prescribe any of the
drugs from the banned list. However
when asked whether there was a spe-
cific medicine which they felt should
not have been banned, a sizeable
number (75.3 per cent) answered in
the affirmative. Codeine combina-
tions which are prescribed almost
universally for treatment of cough,
and nimesulide preparations for pain
and fever received the most votes in
their favour. Other drugs that many
doctors wished to continue pre-
scribing included antibiotics like
azithromycin, paracetamol (for fever)
and some medicines for diabetes.
Hard hit
Anup Soans, editor of MedicinMan, a
widely read electronic monthly news-
letter focused on the Indian pharma-
ceutical industry, had quite another
explanation. “One has to exam-
ine the timing of the government’s
move, the fdc scrutiny and ban was
on the cards for quite some time.
Why now? One wonders whether it is
intended to counter criticism of the
Compulsory Licensing (cl) clause,
because some of hardest hit are
Pfizer and Abbott, both US compa-
nies!” Compulsory Licensing, which
is a provision under the Indian Pat-
ent Act 2005, allows the government
to force any multinational pharma-
ceutical company to share its patent
rights with an Indian company if it is
required for the welfare of the Indian
people. This has long been a bone of
contention in India’s dealings with
western countries and recent reports
in the global media suggested that
India had promised the US not to
invoke the clause, causing much
heartburn in certain quarters. How-
ever it cannot be denied that other
than Pfizer and Abbott, most of the
companies affected by the latest gov-
ernment order are of Indian origin.
Likewise Medecins Sans Frontieres
(msf), also known as Doctors Without
Borders, issued a statement welcom-
ing the ban order saying, “The list of
banned drugs includes several fdcs
containing multiple antibiotics long
used injudiciously, contributing to
the development of resistant strains of
infection-causing bacteria. Irrational
fdcs containing important anti-tb
drugs such as quinolones (ofloxacin
and levofloxacin) and linezolid are
rampantly available in the Indian pri-
vate market, which has resulted in
worsening prevalence of drug-resis-
tant tuberculosis (dr-tb).
“This year, India has a double chal-
lenge: phase out irrational antibiotic
fdcs in the private sector that are con-
tributing to resistance generation, and
to phase in the who-recommended
daily fdc regimen for drug-sensitive
tb (ds-tb) to the national tb program,
which has been shown to increase
adherence and reduce pill burden.”
What happens next is anybody’s
guess.TheDelhiHighCourthasissued
an interim stay on five banned prod-
ucts of Abbott and some products of
the other companies and listed their
petitions for hearing next week. Peti-
tions no: 2213/2016 and 2214/2016
(Abbott) have been listed as ‘pending’
just like petitions no. 2395/2016 and
2212/2016 (Pfizer). At least 20 other
companies have also obtained a stay
on their own products, while idma is
planning its own legal action.
As it happened in the case of the
government’s 2007 effort to weed out
irrational drug combinations, this
time too the dispute could become a
tortuous legal battle, unresolved for
years on end. In such a case, the ulti-
mate loser would be the Indian peo-
ple. One must hope and pray that
this does not happen. u
SUMIT GHOSHAL
feedback@businessindiagroup.com