PharmAsia : Balancing Innovation And Affordable Pricing In India
Executive Summary
Over the last five years, Boehringer Ingelheim has stayed aggressive on India. It continues to be so and in a signal of further optimism its global chairman Andreas Barner outlined in a discussion with; PharmAsia News; more new plans that will fuel growth, including weighing financing models to bring oncology medicines to a wider income strata.
MUMBAI ;– Germany’s family-owned drug maker; Boehringer Ingelheim GMBH; is set to kick start its oncology business in India and going by initial indications, the firm is weighing options on several models ranging from differential pricing to a staggered payment system to make its products affordable among a wide income group of patients.
Andreas Barner, the global chairman of BI, a company that generated sales upwards of $16 billion last year, was on a short trip to India and he told; PharmAsia News; the company is close to introducing its non-small cell lung cancer drug ;Giotrif ;(afatinib) to be followed up hopefully with the launch of nintedanib (brandedOfev) over time.
Segmenting Rich And Poor
While stressing that large innovator companies need to fund research and bring innovative medicines to market, Barner expressed cognizance that countries like India also needed to have lower prices. But he added that the solution, in part, is for the government to take actions so that the drugs can be made affordable. “One has to navigate between the two needs – to have countries like India use the latest drugs and to fund research of new products.”
Barner, in his characteristic soft-mannered approach, said India now has a large section of affluent population which may be easily the size of Germany, where people are financially capable of paying for new drugs.
“All this has to be balanced and I understand that the government wants to speak of cheap generic prices but to have generics, you need [patented] originals and if there is no research, there will be no originals,” he summed up.
If it had to do only with prices as a determinant factor, Barner noted, the issues would have probably been easier, “but if you bring in all the different aspects together, it is more complex,” he said. He however indicated that with new access models like differential prices, his company may find a way to dealing with pricing issues reasonably.
Pricing Across Layers
Alluding to tiered pricing as a possibility, Barner said a few companies have explored that route. Sharad Tyagi, managing director, Boehringer Ingelheim India, however noted that model may be open to its own challenges and shortcomings like the proliferation of a product from the lower income group to a higher income group of patients who may otherwise be able to afford it.
Tyagi, who has steered the company’s new initiatives over the last five years, detailed that his company is looking at many different options based on several parameters to ensure access programs for patients across income strata ("Boehringer Ingelheim India Managing Director Sharad Tyagi On Local Threats, Opportunities : An Interview With PharmAsia News (Part 2 of 2)" —PharmAsia News, Mar. 11, 2013 4:41 PM GMT).
“We have considered a few models. We are also talking to certain organizations to look at financing possibilities for patients, because apart from just the absolute amount of money, sometimes it is also the issue of how to manage the cash flow issues for the patients like can the entire money be paid at once or can the payments be made in installments.
“These are important issues and we are also hoping that health insurance sector will be more robust in the coming five to ten years. But we are not restricting our thinking. We are looking at several ways in which we can look at the price of our drugs although these are not easy issues as there will have to be partnerships with several different institutions.”
In 2013, Japanese drug maker; Eisai Co. Ltd.; had introduced tiered pricing in India, in addition to Hong Kong, Thailand and Philippines, for its novel breast cancer compound; Halaven; (eribulin) ("Eisai Brings Halaven To India With A Tiered-Pricing Strategy" — PharmAsia News, Oct. 7, 2013 6:13 PM GMT).
Merck & Co. Inc.; is another company that had an extensive rollout of its staggered financing system through its “Sambhav” project for the treatment of hepatitis C in high-risk states like Punjab and Andhra Pradesh ("Exclusive: Merck In Multiple Partnerships To Finance Hep C Treatment In India" —PharmAsia News, Mar. 24, 2014 7:42 PM GMT).
Big On India
Unlike a few of its peers, Boehringer Ingelheim has seen a sustained momentum in its Indian operations. Barner expressed satisfaction about the company’s India presence and noted that from the time the company started operations in 2010 under its own identity, growth rates have been absolutely “remarkable and startling” aided by its democracy and the teeming population of 1.2 billion.
He said he sees a bright future for the long term players and downplayed concerns about the deteriorating perception of India’s clinical trials, in contrast noting that the country had a good history of handling clinical trials. Specific to the overarching rules for conducting clinical trials in India, Barner said he was getting good signals of a changing environment overall.
“While I was then not pessimistic, I would not be too optimistic now and say everything is perfect. I think the new government is thinking of topics that have been hindering the development of the country on questions like giving up certain regulations or laws that are not anymore relevant…I think from the philosophical point there are important signs and signals and now one has to wait and see but I continue to be optimistic for India.” ("Boehringer Ingelheim Chairman Andreas Barner On Emerging Markets Strategy: From Clinical Trials To Commercial Launches" —; PharmAsia News,Nov. 6, 2012 6:41 PM GMT)
On his trip, Barner said he met key opinion leaders in oncology and also diabetes segments, where he said a huge demand is expected for new drugs. Barner made specific reference to Boehringer Ingelheim’s preparedness to bring into India its SGLT-2 brand; Jardiance; (empagliflozin) during the year.
The chairman highlighted the positives of the product like weight reduction, glucose reduction and the blood pressure lowering features, which can add an important edge to its anti-diabetes portfolio.
Boehringer Ingelheim has clocked strong success with its DPP-4 inhibitor brand Trajenta; (linagliptin) in India, growing at roughly 50% over the last three years, despite a strong presence of Merck’sJanuvia; (sitagliptin) and; Novartis AG’s; Galvus; (vildagliptin) ("Pinning Hopes On A Wider Offering, Boehringer-Lilly Launch DPP-4 Trajenta In A Crowded India Market" —; PharmAsia News; Jun. 15, 2012 5:06 PM GMT).