	A massive multi-district litigation (MDL) filed against pharmaceutical companies engaged in the production, marketing, and distribution of prescription painkillers is raising questions about insurance liability and who will ultimately be held responsible for the nationwide opioid epidemic.

	Plaintiffs in the lawsuit are alleging that the manufacturers of prescription opioids “grossly misrepresented the risks of long-term use of those drugs for persons with chronic pain.” Distributors are also alleged to have “failed to properly monitor suspicious orders of those prescription drugs-all of which contributed to the current opioid epidemic” taking the lives of about 115 Americans per day. 

	What started as a lawsuit aimed at the largest manufacturers in opioids has expanded to include companies involved in nearly every stage of the supply chain, and middle-market distributors are far from immune. The MDL has ballooned to include hundreds of individual cases and dozens of defendants so far. Two lawyers I spoke to described the attorneys representing the municipalities, hospitals, third-party payers, union benefit plans, and Native American tribes named as plaintiffs in the MDL as “carpet-bombing” the industry by roping in as many companies as they can. 

	Many of the large pharmaceutical manufacturers and distributors named as defendants in the litigation were initially involved due to their marketing of branded opioid products. Most middle-market firms had no role in the marketing excesses alleged by the plaintiffs, but this hasn’t stopped plaintiffs from naming them in complaints.

	Presiding Judge Dan Polster is seen by many as a social reformer who will use this case to take meaningful strides in the mitigation of the opioid epidemic. Many believe Polster is pushing to resolve this issue with a settlement that could leave the industry on the hook for billions of dollars in restitution and legal expenses.

	Whether or not middle market distributors contributed to the widespread use of opioids, these companies are subject to the significant legal costs, business interruptions, and reputational damage that come with being named in the MDL. Making matters worse is that many of these companies may be more exposed than they previously thought. 

Understanding the insurance market’s response

	Part of what makes this MDL unique is that most of the cases are not general liability cases that focus on bodily injury or property damage that typically trigger an insurance policy. Rather, plaintiffs are arguing it was intentionally malicious and deceitful behavior that led to the financial burden imposed on the local municipalities that have been left to pick up the pieces today. As a result, many of the claims made in these cases do not include specific allegations that would trigger general liability policies and force insurers to address subsequent legal costs. In fact, I spoke with one lawyer representing several middle-market opioid distributors in the MDL who told me they are yet to see a single insurance policy be triggered as a result of this lawsuit. 

	One underwriter told me that insurers do not want to be “walking into a burning building.” Rather than leaving any room for policy language debate, some carriers have taken immediate, decisive action to insert outright exclusions for opioids and governmental actions into their policies. Others are attempting to exclude allegations involving opioid addiction, but may distinguish addiction and associated marketing actions, leaving the door open for claims resulting from design or manufacturing defects. Finally, some carriers are making distinctions to pare coverage back as it pertains to specific opioid exposures, including clinical trials, animal products, and newer products used exclusively in hospital settings. There is also a product identification issue for newer distributors that may be roped into the MDL despite having no involvement in the initial alleged marketing excesses of the branded opioid products that are at the center of this mass tort. This predicament could force an insurer to rely on a summary judgement to extract the distributor from the lawsuit, which puts insurers in a difficult position. 

	While reinsurance affordability and availability have also made underwriting this risk more challenging, some insurers are still willing to consider it in some cases. However, securing a policy that meets the risk tolerance needs of the insurer while providing adequate coverage for the distributor will require additional negotiations and a more meticulous eye when reviewing the policy on behalf of both parties.

How distributors can still protect themselves

	This new insurance environment places companies in a tough spot. Insurers are examining their general liability policies very closely to protect themselves from any unnecessary exposure, and the policyholders must do the same by working with their brokers to understand how their coverage may be affected. 

	Distributors should also consider a number of risk management actions to reduce their liability. They can start by reviewing their legal and regulatory obligations as it pertains to their oversight of opioid orders. The Controlled Substances Act mandates that all DEA-registered entities distributing opioids must “design and operate a system to disclose ... suspicious orders of controlled substances.” It is imperative that distributors be able to demonstrate and justify the efficacy of their order monitoring systems to prove they’ve fulfilled this obligation-which may require upgrading or updating their reporting mechanisms. 

	Conducting and documenting a contractual review of relationships with manufacturers, doctors, and pharmacies to ensure that responsible prescription and distribution practices are maintained is prudent. Manufacturers, distributors, and other third-party contractors are also held responsible for varying levels of oversight depending on their agreements with each other and pharmacies and doctor networks. Any opioid distributor with exposure in the current legal environment must take a close look at these documents to identify these obligations and ensure they are being fulfilled. These agreements also tend to contain indemnification provisions that are worth a close review as they have the potential to clarify and/or transfer a company’s culpability to someone with the greatest responsibility for the product while increasing their likelihood of securing an insurance policy. 

	Finally, distributors should take proactive measures to address the public opinion concerns surrounding opioid abuse. The MDL only serves to reinforce the public’s perception that the pharma industry is to blame for the opioid epidemic. Community outreach campaigns, partnerships with local advocacy groups, and communications programs aimed at educating doctor networks and pharmacies on the dangers of opioid use can align an organization as being part of the solution, as opposed to the problem. 

	No matter their level of involvement in any accusations against the pharma industry, middle-market distributors must do everything they can to reduce their financial, operational, and reputational risk in the face of the MDL. While the current focus of the plaintiff’s bar may rest with the costs of abuse to municipalities, in time they may

 focus on individuals injured by such exposure or addiction to opioids. At that time, companies manufacturing or distributing pain medications and their insurance carriers may be in the bullseye. As such, review of new allegations and careful reports of such circumstances to your product liability insurer may preserve liability coverage should a distributor become aware of specific injuries from such pain medications to patients.

	This litigation could usher in a new normal in opioid manufacturing and distribution. That new normal could mean opioid manufacturers and distributors must comply with new regulations and practices to ensure effective marketing, communication, and safety practices are in place. A settlement could further impose such new standards and limits on business operations, resulting in additional requirements by distributors to take further preventive measures to ensure the safe distribution and consumption of these powerful drugs. By taking the right risk management steps and understanding the important role of insurance, companies can be better prepared to navigate impending litigation. 

is Life Science Practice Leader at Conner Strong & Buckelew

Articles

Columns

The role of insurance and risk management in protecting middle-market distributors from the growing opioid multi-district litigation (MDL).

Opioid Litigation: Evading the Widening Crosshairs

Outlining a real-world example in which building and operationalizing a patient- and customer-centric commercialization strategy drove a successful launch from a “standing start”

	Patient-centricity and customer-centricity are high on the agenda of many pharmaceutical companies. Most state that they are patient- and customer-centric or have an aspiration to be so. But what does that look like in reality, and how does one create, build, and lead a patient- and customer-centric approach from an operational perspective? And is it merely a branding or “feel-good” exercise, or can this approach drive deeper benefits, both from a business perspective and in terms of employee engagement?

	Such an approach can actually drive both, which may be a critical differentiator when “time to launch” and return on investment is under increasing pressure, and at a time when engaging effectively with the workforce to bring best results with tightened resources is a defining success factor for leadership teams.

	Many decision-makers are critical to the successful launch and commercialization of a new treatment. Regulatory authorities must approve a new drug; physicians have to believe in the utility of the product and understand where it fits in their therapeutic arsenal; payers or reimbursement authorities need to agree to fund it; and, ultimately, patients and their families have to believe that they will benefit from it. 

	This means there is a complex series of stakeholders and decision-makers-essentially customer communities-that needs to be engaged to deliver the successful launch and commercialization of a new drug. And when different effective treatment regimens are established, finding a place for a new drug can be a challenging and complex process, particularly in some rare disease areas, where communities can be close-knit.

	In order to meet these challenges, the leadership team, in this case study, identified “Patient- & Customer-Centric Commercialization” as a way of operating. The objective was to create an organization that actively sought dialogue with each decision-maker or stakeholder to understand their needs, and to create collaborative approaches to respond to those needs; in other words, a unified cross-functional launch team-commercial, medical affairs, and access-supported by HQ functions, whose operating model was based on listening and responding, rather than “talking and telling” or selling.

	Each function within the launch team consulted as early as possible with the decision-maker, or customer, at each stage of the process to bring their concerns or needs into the internal strategies and decision-making; the resulting plans and roll-out were built on the basis of addressing these concerns. This started with building a total understanding of the patient journey-the experience and the touchpoints that a person with a given condition experiences. This set of experiences and interactions served as a roadmap for the launch teams. By understanding this and then treating each decision-maker as a facilitator rather than a barrier, seeking to align the company’s approach to the decision-makers’ insights at each step in the development and availability process, the teams were able to create integrated and impactful outcomes. Indeed, all country launch plans were required to include a fully integrated commercial, medical, and access approach with an accompanying map of

 the respective “patient journey” for that country. This map included the stakeholder and support network, with actions for how to appropriately support and engage.

	The result of this approach was a launch franchise getting to market in shorter timelines than the industry average in almost every European country, reaching almost €300 million in European revenues in just two years. The company went from being a relative unknown in a competitive field dominated by big pharma companies in 2012 to top rankings in the therapeutic area by 2017 and trusted as a brand. The company was also able to negotiate price increases for a product that was, for historical reasons, dramatically underpriced to the level of commercial unviability in some key markets. Rather than being forced to withdraw the product, the company was able to work with health authorities to secure more realistic prices that allowed it to continue to make the treatment available.

	The approach also had a motivational effect on the internal company community, creating a workforce that felt genuinely engaged and empowered to deliver. Aligning alongside the patient journey to understand what customers at all stages of the process wanted and needed and creating a built-in approach that aligned with those needs were aspects that harnessed employee motivation. At a time when resources are stretched, inter-generational interactions between leaders and incoming talent is a key focus; the ability to engage across the organization is a core leadership skill. A cross-functional, cross-border focus on the patient was a key element in creating motivation and a sense of purpose.

	The approach to building and operationalizing a patient- and customer-centric business took place against a backdrop where interactions with all stakeholders are under the spotlight and stakeholders themselves are alert to perceived undue influence. In many parts of the decision chain, interactions are strictly regulated-there are clear rules about when and how companies may communicate with regulatory authorities, and how company-physician or key opinion leader (KOL) interactions should happen. Other stakeholders, such as patient representatives, are guided by codes of conduct. Thus, what is appropriate outreach or interaction is in the hands of the company and its individuals. The way

to do it may only be discovered after mistakes have been made and the repercussions felt by the organization and the business.

	It was vital to orient all members of the company around the rapidly changing external environment and appropriate behaviors, taking into account not only the legislative framework, but also individual accountability. In a diverse business with many different conversations happening across geographies, business units, and functions, reliance on heavy rules can lead to inertia; individuals can become fearful of taking the initiative. In order to be compliant with the rules and, at the same time, facilitate a pioneering, integrated approach, personal awareness and accountability was a critical success factor to navigate grey areas and still “do the right thing” in terms of compliance. Raising employee self-awareness helped to ensure that the company was conducting its business appropriately, while still working collaboratively with decision-makers and communities and allowing internal decision-making to be guided by what the external customers needed.

Collaboration with payers and patient reps is essential

	The patient- and customer-centric model extended across almost all aspects of the business, from designing the packaging to the medical teams’ interactions with physicians, as well as the engagement with academic, clinical, and regulatory bodies. The approach to two of the key communities-payers and patients-arguably gave the most significantly pioneering results in terms of building a successful commercial launch that respected the integrity of all the communities involved.

1. Collaborating with pricing authorities to accelerate positive pricing & reimbursement decisions

	To address the many pricing hurdles in a launch preparation, we initiated a program of individual dialogue with the pricing and reimbursement authorities in each individual European country. We used the dialogue to understand where the payers saw the biggest challenges in agreeing to pay for the new treatments, and how these could be overcome. The HQ teams built this feedback into the pricing and reimbursement strategy and materials. This resulted in an approach to pricing, provision of specific evidence that the budget holders needed, and the development of further data, where needed, in order to move the conversations forward-all of which was based directly on payer input. We were able to reduce times to positive reimbursement decisions across the launch markets, and in some cases, almost one year faster than the industry average.

2. Collaborating with the patient community to create meaningful programs for the therapeutic area

	In well-defined rare diseases, the patient communities are represented by not-for-profit associations in a tightly knit community that is well-organized and structured. Funds, for a large part, come from companies developing and manufacturing therapies for the condition in question. This can create potential tensions, because companies might express a desire to influence which activities and programs the associations undertake, while the associations might feel pressured to follow the companies’ suggestions.

	To engage the patient community on a customer-centric basis, the launch teams invested in creating a real and very genuine dialogue with the community lead representatives. By diving deeper into what really mattered for the community, the organization discovered several areas where the patient representatives felt unable to initiate and develop programs that were of critical importance to them. That was because such programs did not give rise to “traditional” areas of publicity and, therefore, were not of sufficient interest for companies to fund. By identifying these areas and putting together programs of support that were driven by the patient needs rather than the company’s ability to participate or “brand” the offering, the team was able to forge a more meaningful approach to positioning the new therapies in the context of existing established treatment options.

	Indeed, the approach to the payers was born of a request from the patient leadership, which expressed that one of its biggest concerns was that the new therapies would only reach “the privileged few.” Its guidance led to the payer outreach program mentioned earlier and an approach that was built on “pricing for access”-to secure that the new, first-in-class therapeutic options could reach as broad a community as possible.

	In our case, it could be argued that necessity drove a need to develop and deliver a patient- and customer-centric approach to commercialization. The company was relatively small, with no dedicated medical or sales force in place for the therapeutic area. It was a relatively unknown organization in the therapy area, seeking to enter a market dominated by large, well-established players. The launch was critical to the future of the company. Building on the drugmaker’s rare disease legacy by identifying a genuine and sustainable patient- and customer-centric operating model was a way to turn its small scale and newness in the field to its advantage. 

	Adopting this model meant that the organization was able to successfully enter and launch in an established competitive landscape and to win business from a standing start and in a short time horizon. It also created an engaged and motivated workforce “with a heart.” Most importantly, the approach helped facilitate earlier patient access to a more advanced and beneficial treatment.

 is Head of Patient Access & Commercial Planning at Mereo Biopharma. 

 is the former Head of R&D for GSK Rare Diseases, and is a non-executive director on several biotech boards.

Features

Outlining a real-world example in which building and operationalizing a patient- and customer-centric commercialization strategy drove a successful launch from a “standing start.”

Patient & Customer-Centric Commercialization

Getting ahead of legal and compliance issues requires more these days. At CBI’s Pharmaceutical Compliance Congress, experts gathered to discuss new ways to navigate the many currents in the industry when it comes to the crucial task of assessing business and risk

	Like most instances in corporate compliance, hindsight is 20/20. Unfortunately, for the biopharma industry, any number of negative compliance issues can cause political, legal, public image, and reputation problems that potentially could take a number of years from which to recover.

	However, pharmaceutical compliance covers such a broad spectrum of potential problems, from day-to-day HR compliance, to foreign corruption and bribery, patient assistance programs, drug pricing and transparency, off-label communication, manufacturing, opioid and Department of Justice

	(DOJ) issues, and so much more. Changing regulations and laws, as well as potential business practices that aren’t yet deemed illegal, keep compliance executives and pharma counsel on their toes. 

	Recently, the DOJ has placed attention on the practice of pharma companies donating money to charitable patient assistance programs, specifically those that help patients defray drug co-pays or total drug costs. Regulators have noted that when such donations aren’t managed in an appropriate way, they can raise concerns under the Anti-Kickback Statute. Recent settlements between pharma companies and the DOJ were discussed and analyzed in sessions at CBI’s Pharmaceutical Compliance Congress (PCC) to help others navigate these new waters.

	At PCC 2018, held at the end of April in Washington, DC, 

, with our meetings partner CBI, held a roundtable discussion to assess the state of the compliance role within the biopharma industry.

In your experience, how does compliance get a seat at the table? Do they have a seat at the table? Or is it a mix?

You have to earn it by value. We know that our business leaders will resource what they value. We need to understand the environment, the associated risk, and, more importantly, apply it to the business practices in a relevant way so that we can enable the business to be competitive and compliant. When you do that, business will want compliance at the table.

With the clients that I work with, it’s very varied. By and large, at multinational companies, compliance is very mature, sophisticated, and has access to executive management, which is clearly adding value. Where I see gaps is in the less-mature companies-the start-up space or certain non-US markets-where compliance hasn’t received the attention and the resources that it has in the United States.   

What we mean when we say access to a seat at big tables is access to the board and executive teams on major decision-making within the corporate realm. The challenge that compliance as a function continues to have is the staffing abilities of compliance or legal departments, which means they can’t have a seat at all of the tables that are ongoing simultaneously within a company. 

	But having said that, sometimes you see start-up companies, when the compliance officer is the 15th employee at the company, and 15 people are always sitting around the table, you’re getting compliance input at every germinating thought and seed.

	But what if you have a 5,000-person commercial force and 40 compliance personnel to oversee them? There are meetings and ideas that are coming up all the time where compliance isn’t a part or invited or being asked the questions. And compliance can only address questions that are effectively asked or that are within its visibility. So, oftentimes you only see that through later auditing and monitoring.

Seth, I somewhat agree. But I think we’ve got to be careful because compliance should not need to have a seat at every table or at every discussion. If we want compliance to be sustainable in an organization or an industry sector, then ultimately the business has to own compliance. And, just like a CEO looks to their leadership team to deliver certain performance objectives during a year, they should hold their management team accountable to also know ahead of time what the big risks are and what they’re going to do to mitigate them.

The fact of the matter is this industry has become so incredibly complex, that even within your compliance departments you must have different experts to address different areas, because one person can’t possibly be able to retain all of the information. Therefore, in any given business meeting, expecting that the business is going to have information that even trained compliance personnel don’t have in every instance is a challenge unto itself. Some companies use liaisons who are not in the compliance department but are more specifically trained through compliance, and delegating them responsibility, is in and of itself a compliance function.

 We just touched on the resource issue for smaller companies as a benefit and a challenge. What is your experience in regard to the smaller biopharma?

In large and small organizations, it’s really about the relationships. In a small company, with a single compliance officer or a compliance team of maybe two or three, they can enhance their effectiveness when the right relationships are created with the right people within the business. So, it’s not, “Hey, just tell me everything that’s happening”; but it’s, “Hey, you understand what my goals and objectives are, I understand what your goals and objectives are, let’s help each other.” 

You need collaborations with finance, legal, regulatory, HR, QA, and others that have compliance responsibilities in any company, but it is especially important if you are in a smaller company, with more limited resources; you can rely on strong collaborations to achieve compliance objectives. 

Well-trained business executives who are committed to compliance become an extension of compliance and legal and the values these functions represent. I’ve worked with many business partners over the years who have become extremely knowledgeable about compliance risk and who think about compliance when they are rolling out innovative new ideas. To some, it comes naturally. To others, less so. But the key is to spend a lot of time having conversations, explaining the “why,” so business partners can self-identify issues and bring them to us. That creates awareness within the business, the function that’s conducting the activities.

Is an ethical and compliant company built up with good people that you hire? Is it an attitude? Or is it from the top down?

Management needs to drive it. That’s the differentiator in so many decades hearing about tone at the top or tone at the middle. Management needs to drive, because most good leaders know “you get what you inspect.” If their message is all the time, “Perform, perform, perform and, oh, by the way, comply,” then you should not expect to get a culture like you would if the message was, “We’re going to do this the right way and make sure we effectively navigate the risks that will challenge business performance and our organization’s mission and values.”

The tone that we’re talking about is set in three different ways. When we talk about tone at the top, that means not just verbal messaging, but also action and budget. And you have to have all three of those things happening simultaneously for the tone to be most effective.

It is helpful when a company’s leadership believes in an overarching concept of performance with high integrity. Nobody wants to work at or for a company that doesn’t perform. Everybody wants to be with a successful company. But to do it with high integrity can sometimes be challenging because everyone comes at it from different perspectives or different levels of risk tolerance. 

	On an individual level, risk tolerance is greatly impacted by the past personal experiences of the people you are dealing with. The people who have been deposed or have gone through a formal investigation see compliance in a very different light. They are much more open to hearing the advice of the compliance officer and legal because they don’t want to go through it again. And they are much more willing to work with you to achieve the objectives they want to achieve. The goal is never to just say no, but to take a different route or take the same route with different controls to make it safe.

There is an element of who you hire in the key roles in your company. Compliance and legal should be involved in the interview process for those who are going to be in potential key stakeholder positions so that people who are like-minded are hired. People who are committed to business ethics. If you don’t want a mixed bag and are looking to build a culture of integrity, then you have to have that in who you hire, and you have to have that in who you involve in the hiring process. I think that’s an important element in building a compliance-minded culture.  

How do you stay on top of, or ahead of potential problems? For example, the issues coming up with patient assistance programs. How could compliance mitigate that before it becomes a problem?

It’s a question of not fighting yesterday’s battles. If you’re just doing what a CIA* requires, you’re maybe only chasing the bad conduct of a decade or two decades ago. How do you spot things that are going to be the subject of enforcement actions in the future but maybe have not been in the past? 

	With patient assistance, did anybody see that coming? I think that’s debatable. But there are probably five to 10 other similar practices where there’s not historically been enforcement action, but the government will at some point turn to that and start suggesting that the practice is violative of some law or regulation.

When we talk about things like patient assistance as a growing area of risk, it is easy to have some level of compliance ignorance. As a defense attorney, every case that I handle is involving conduct that happened a minimum of three years ago and oftentimes eight to 10 years ago. If you’re looking for only-as Tom was indicating-those things that someone has already demonstrated that this was the wrong path, you’re looking back at things that people did five to seven to 10 years ago. And that’s not novel or instructive of where the risk is today and what someone’s going to be looking at five years from now.

Looking to the future, I think businesses should partner closely with compliance and legal in building out their patient engagement programs. This is such an important area and one that is poised to deliver increasing value back to patients and communities as time goes on. That said, because patient advocacy departments are growing and engaging in new and innovative activities at every phase of a medicine’s lifecycle, these activities must be thoughtfully structured so as to deliver value to patients without sacrificing compliance.

	We already know that patient-related activities are a focus of DOJ enforcement, albeit on the hub side for now. But enforcement could expand to other areas like patient field interactions in the future. We know, for example, that HCP (healthcare professional) field interactions has been a huge area of enforcement for years. So, when you put it all together-increased patient interactions, including in the field, at a time when DOJ is already focused on patient-related activities-we know this is an area where we should be careful. The compliance function should be thinking about patient field activities and helping the business to appropriately structure those interactions while still serving the overarching goal of patient centricity. 

You also have to have some common sense about this. If you understand that the government in the past has been focused on following the money, for example, the focus on HCPs, and if you follow the money and you are putting a lot of money into patient-related activities, whether it’s foundations, hubs, patient support services, or other interactions, then you need to look at those things to predict where the enforcement has been in the past. I just think you need to be practical and smart to get the right kinds of controls in place and the right visibility in place for these activities.

It’s also being plugged into the business and knowing what their challenges are, particularly within patient access. There’s a lot going on now in the industry in terms of how patient access works, how co-pay programs are going to work or look in the future. The more that compliance professionals understand the challenges that the commercial and business folks are facing coming up with solutions to potential barriers and problems that their brands are going to be facing, the more successful compliance will be. Because if you understand that fundamental challenge that your business is facing, then you can help them navigate from a risk management standpoint.

You also need to be plugged in with the various communities, by coming to congresses like PCC, to be able to identify what’s going on with peers, what other professionals are seeing in the marketplace, or interacting with panels like we had with prosecutors to hear what’s on their mind. You need to have an outside resource that you can check in with. The value of consultants, attorneys, and peers are to see what else is going on in the industry that you wouldn’t know about just by being back at home.

The Corporate Integrity Agreement, or CIA, is an enforcement tool of the US Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) and is part of a settlement agreement arising from allegations of healthcare fraud.

What about the nuances of third-party involvement? Some programs evolve very quickly, and how does that get managed?

The framework is basically four pillars: 1) conducting due diligence on your third parties; 2) contractual protections making clear what their obligations and responsibilities are; 3) audit rights that you exercise to monitor what they’re doing; and 4) back-end monitoring or analysis of data and such to oversee what they’re doing. 

I would use the fourth as a way to help to ensure that there is an ability to cut bait or terminate-walk away, when necessary. And that goes back to setting the tone of compliance. If you don’t come back and audit, if you’re never willing to terminate an independent contractor arrangement, then it sends a message or tone throughout the company, and other suppliers as well.

I do think in terms of the patient-support programs-your hubs, reimbursement services, co-pay vendors-that a trend is historically these programs were built out in silos, within certain therapeutic areas and franchises. These teams would go to their preferred vendors and manage the programs their way. I think the industry has taken a step back and looked at that to say that system needs to be more efficient and consistent. We need to consolidate. There’s a movement to bring things together and consolidate across departments and functions, especially in large organizations. 

Two keys are visibility and partnership. Visibility comes when business functions develop strategic plans and share those plans with compliance and legal. Just like marketing develops marketing plans, advocacy can develop a yearly patient engagement plan and share it with compliance and legal. The same is true for medical. This allows innovative ideas to be discussed at the conceptual stage, and any compliance considerations to be woven in, before they are implemented in the real world. The yearly strategic plan is only the first step to visibility and partnership. As strategies evolve throughout the year and as new ideas arise, these should be shared with compliance and legal through a process of ongoing concept reviews. That’s good partnering. 

How do you review or reinforce compliance throughout the company?

Compliance should be more than just straight compliance with the law. Each organization should have a meaningful risk management approach. And that means taking a moment out of time and thinking about what those risks are based on the environment, based on the practices of any one company, and then asking, “How well are we doing here?”

	Part of that answer comes with checking out what the most recent guidance has been, what the most recent investigations have been, and what the most recent practices have been.

It’s the continuous part of the process that has to happen. If you do something once, that’s great; but if you haven’t done it in some regular period of time thereafter, the world continues to change and it can pass the corporation by. There isn’t a prescribed period, but there ought to be some regular process that occurs so that you’re constantly doing a checkup. 

And the continuous process is not only just adding on or being more conservative. It’s revisiting processes and finding undue complexity, where we thought the way to manage a few years ago on a particular topic was one way and we realize it’s totally hampering the business and may not even be mitigating the risk we thought it was in the first place.   

	I have a fond memory working with you, Tom, at one point, when EY was our independent review organization. Even we had very positive results; at times when you would share with me minor deviations of a process, you looked at us and said, “Listen, your process has 10 steps to it. The process only needs two or three steps to address the risk. But if you have the 10 steps and you miss one of them, we’re going to cite you for a deviation.”

I think companies get inappropriately faulted, though, too, because awareness doesn’t necessarily mean that the issue has been fixed or addressed. When you become aware of a risk, there’s an entire process that necessarily needs to take place to be able to understand, address, and mitigate that risk. And that process takes time, particularly when the risks are new. Even when compliance is working 100 percent as it should, you can’t necessarily snap your fingers and immediately mitigate risks as soon as they’re identified. That’s an unfair expectation to put on corporations and certainly compliance departments.

As chief compliance officers grow to view themselves more as chief risk officers who look past the current enforcement landscape toward what is likely to be enforced next, we may become a more proactive profession. But even so, it’s hard for compliance officers to convince their business not to do something or even to do it in a different way when three factors are present. Competitors are doing it. There is no existing enforcement to point to. And the only argument to adopt a different practice is the compliance officer’s prediction of future enforcement. If those three things are present, even today, it’s difficult to win the day unless you have a very strong culture of compliance. 

Pharm Exec convenes an expert panel at CBI’s Pharmaceutical Compliance Congress to discuss new ways to navigate the many complexities when it comes to the crucial task of assessing business and risk in the life sciences.

Compliance: The Critical Cog in Pharma Machine

While the field of regenerative medicine has grown considerably since the ’90s-in innovation and acceptance-entrenched companies such as Athersys are looking to forge new advances in the stem cell arena by transforming promising science into real-world treatments

	If we’ve learned one thing, it’s that science moves in mysterious ways. Science is more of an art than say, a science. How else can you explain the history of Athersys, and the journey of its co-founder, Dr. Gil Van Bokkelen? He received both a BA in Molecular Biology and Economics from the University of California at 

Berkeley, and a PhD in Genetics from Stanford University School of Medicine. But rather than practice medicine, Van Bokkelen says, “I didn’t want to be the person to say, ‘sorry, I can’t help you.’ I wanted to be part of the solutions.” From there, he and his compatriots were wooed in the mid-1990s from the beauty and promise of the early biotech presence in San Francisco to the Midwest, where promising technologies developed in local academia were leaving. While Van Bokkelen and Athersys co-founder Dr. John Harrington were not exactly thrilled at the prospect of a move to the Midwest, the opportunity was too great .

	“We met a handful of people with a vision at Cleveland Clinic, Case Western University, and University Hospitals,” says Van Bokkelen. The leadership at those institutions and in the local community were tired of seeing young entrepreneurial talent leave Ohio and move to the coasts, a phenomenon referred to as the “brain-drain.” They decided it was time to create a magnet that would help attract, incubate, and retain entrepreneurs and innovative young companies, and made the commitment to work with the team from Stanford to establish a business incubator specifically designed for fledgling biotech companies-called BioEnterprise. Athersys was formed from those efforts (learn about the moment in medical school that ultimately inspired the company's launch in our 

	The work that Athersys was doing back then was a prelude to the company’s current focus on regenerative medicine. At the time, the founders of the company made international headlines by creating the world’s first entirely synthetic human chromosome. This accomplishment was quickly overshadowed by the cloning of Dolly the sheep in Scotland reported in 

 in 1997. The scientists had produced a lamb named Dolly that was created from genetic material from an adult cell. However-along with a flurry of global reactions from the US, European Commission, and the Vatican-cloning itself continued, but proved inefficient and unscalable. 

	Fast forward 20 years, and the acceptance of regenerative medicine, which encompasses the fields of gene therapy, gene editing, cell therapy, tissue-engineering, and organ regeneration, has made major strides. FDA approvals for Novartis’ CAR-T Kymriah and Spark Therapeutics Luxturna last year, along with clinical trials in other oncologic and rare diseases are paving the way in the larger regenerative medicine field. A recent report indicates that the global regenerative medicine market was worth $18.9 billion in 2016 and will grow to over $66 billion by 2022, with a CAGR of 23.3% between this time frame.

	But the stem cell area is one that features only a handful of pioneering innovators focused on transforming promising science into real-world treatments, and Athersys is one of them. The company addresses the stem cell scalability issue with MultiStem, described as an “off-the-shelf stem cell product that can be manufactured in a scalable manner, stored for years in frozen form, and administered without tissue matching or the need for immune suppression.” MultiStem has been in clinical trials for several therapeutic areas, including indications in the cardiovascular, neurological, inflammatory, and immune disease areas.

	Athersys has received a lot of recent attention in the market for a spate of announcements, including an expanded deal with Japanese biotech Healios KK, which obtained exclusive licenses for the development and commercialization in Japan of MultiStem therapy for the treatment of acute respiratory distress syndrome (ARDS) and of MultiStem cells used in combination with iPSC-derived cells for the treatment of certain organ diseases. Healios also received an exclusive global license to develop and commercialize MultiStem cells, either as a standalone therapy or in combination with retinal pigmented epithelial (RPE) cells for certain ophthalmological indications, and an expansion of its license to use Athersys technology to support its organ bud programs to include other transplantation areas. 

	But one of the more promising areas for MultiStem, according to Van Bokkelen, is in stroke. He explained that the current standard of care-which is 20 years old-requires that the clot dissolving agent, tPA, be administered within three to four hours after the stroke event. That is a mighty small window for a stroke victim, and most patients don’t get to the hospital in time to receive treatment, especially when many are “wake-up” strokes, or individuals that have had “small” strokes that don’t necessarily have the patient heading to the hospital immediately. 

	The Athersys team believes that while the therapy is not actually fixing the stroke, it is addressing the overactive hyperinflammatory response that is now known to cause much of the permanent damage after a patient experiences the event. This overreaction is then followed by immune depression, leaving patients susceptible to a host of complications in the weeks following the stroke. As a result of the narrow time window for longstanding treatments, the lack of alternative therapies, and the extensive damage caused by inflammation in the brain, most patients that experience significant disability don’t recover, and may depend entirely on care from family members or professional care givers, or need full time institutional care for the rest of their lives. However, clinical data shows that MultiStem works up to even 36 hours after the stroke, to help patients progress past the initial disability and have better outcomes. Athersys has received fast-track status and regenerative medicine advanced therapy (RMAT) designation from the FDA for this indication.

	This is also the theory behind a recently announced trauma trial that is being funded in part by the Department of Defense. Building off of promising preclinical studies, a Phase II clinical trial at The University of Texas Health Science Center at Houston will evaluate MultiStem cell therapy for early treatment and prevention of complications after severe traumatic injury. The study will be conducted at Memorial Hermann-Texas Medical Center, one of the busiest Level 1 trauma centers in the US. Doctors noted that following a serious trauma, an acute hyperinflammatory response is frequently triggered, which can impair recovery and lead to additional complications. They hope to provide more data that MultiStem responds to signals of inflammation and tissue damage by protecting injured cells, stimulating new blood vessels, and the recruiting of other cell types to promote tissue repair and healing to address the response and reduce complications. 

	Van Bokkelen says, “We are committed to conducting well-designed clinical trials for this cell therapy, with consistent safety profiles to address many unmet medical needs, and we are also proud of the environment and legacy of innovation that we helped create here in Ohio.”

’s Editor-in-Chief. She can be reached at 

While the field of regenerative medicine has grown considerably since the ’90s-in innovation and acceptance-entrenched companies such as Athersys are looking to forge new advances in the stem cell arena by transforming promising science into real-world treatments.


Gaining Ground with Stem Cells: Gil Van Bokkelen, Athersys

	Blockchain has been discussed for a couple of years now. First, it’s hype. Then it’s a fad. Then, maybe, a glimmer of possibility. Then, it’s “maybe we need one of those blockchain things.” And depending on which area of the business you are working in, blockchain appears to have great potential to help certain aspects of

 drug development, specifically in the front end and back end-clinical trials and manufacturing. But having said that, blockchain is still in the potential but not proven area of the pharma enterprise.

	I attended the Advents Serialization Innovation Summit in Philadelphia last month, which had an impressive lineup of speakers around “Track and Trace” and the current US and EU regulations, as well as the industry compliance around that topic. Blockchain is but one way that serialization could be achieved. One of the experts from Microsoft offered a very thorough explanation around what blockchain is or isn’t, and what executives should ask before going down the blockchain rabbit hole. 

	Tianna Umann, a solutions architect for Microsoft, explained that blockchain is not bitcoin. She called public blockchain “bitcoin 1.0.” For professional or corporate purposes, enterprise blockchain would be the technology. It is not accessible by the public and doesn’t represent a currency. For our purposes, from now on, blockchain refers to enterprise blockchain.

	Umann also stressed what blockchain is NOT. It is not a data warehouse. It is not an internal database. It does not store data. It has no cryptocurrency. And it is not the solution to all of your problems.

So what is blockchain? Blockchain is single, trusted ledger by which all participants have a mirrored image and visibility to the ledger at the same time. The parties within the blockchain have to be admitted into the peer-to-peer system. And processes that are part of the blockchain are digitized and integrated into the blockchain.

	No one can remove information or “delete” information in the blockchain. Any data in the ledger can be changed or over-written, but that is visible to all in the ledger in the peer-to-peer of who made what change, the time, and date.

	When is blockchain the right choice for you? Umann suggested if any of the three following criteria fit your situation, then blockchain might be right for you.

		Is it a process that crosses boundaries of trust?

		Do multiple parties need to work on the same data?

		Are there intermediaries that currently control the only source of truth? (these intermediaries may incur cost and decrease efficiencies.)

		Does the process involve manual verification steps that have low value?

	Umann continued that some of these questions could be a database fix, and not necessarily in a blockchain deployment. Additionally, there are current concerns that blockchain may be slow. A current popular public blockchain, Ethereum, is not proving to be scalable with low data per second transfer speeds. Umann said that each system has to validate identity, logic, and properties, which takes time and is based on the computing power of the peer-to-peer distributed systems.

	Many in the audience believed with Umann that there are clear use cases for blockchain, including DNA sequencing, health data, prescription data, and personalized medicine. Use cases should start appearing soon, so we will wait for theory to practice.

From the Editor

With blockchain still in the potential but not proven area of the pharma enterprise, when is the technology the right choice for you? 

Blockchain 101 for Pharma Executives

	CBI’s Pharmaceutical Compliance Congress recently convened a diverse and insightful panel to reflect on the state of the compliance role within the pharmaceutical industry. There were several key messages-all invariably leading back to the challenges and opportunities of securing an effective place at a drug corporation’s executive table.

	Unlike the dog who one day catches the car, this goal is not about the chase. The prize here is of utmost importance: the opportunity to build and maintain company value and reputation with key stakeholders, including patients, investors, regulators, and employees; no small task and no small reward.  

	This is, in essence, a corporation’s business case for quality-which compliance is a part of. Quality has been defined by many in different ways. Often times when someone says “quality,” others think “compliance.” But there is a difference.  

	As pioneers of quality management, Joseph Juran defined quality as “fitness for use;” Philip Crosby referred to it as “conformance to requirements;” and W. Edwards Deming essentially said that cost goes down and productivity goes up when quality goes up. In total, quality resonates as something that involves people, processes, performance, and expectations-including those of key stakeholders-and, hence, is much broader and more strategic than compliance.

	There’s no doubt that clear and relevant policies and procedures are necessary in navigating compliance risks. But that’s only the starting point. All large multinational and most smaller organizations have world-class systems in place.

	Yet, compliance issues still arise, some even resulting in consent decrees or corporate integrity agreements, damaging company value and reputation sometimes beyond repair. Why? Navigating compliance risks requires so much more than policies, procedures, and even a seat at the executive table.

	Let’s build on the recent panel discussion with the following quality-related strategies:

Quality and compliance are not spectator sports

. Having someone with a seat at the big table is a ticket to the game. But more than a seat is required for effectiveness. Direction, ownership, and accountability all start at the top of the organization. But for a company to be successful in navigating compliance risks, everyone-not just the compliance officer or department-must have a role with clear responsibilities and expectations.  

Anticipating, identifying, and resolving potential issues.

  How well do you understand your risks and how well are you taking proactive measures to prioritize and mitigate those risks (e.g., working cross-functionally to break through silos) to fully integrate with your business plan? Having the right people with the right expertise and foresight involved in early and ongoing risk assessments is essential.

Building mutual trust and respect – Secret Sauce #1.

Unexpected issues will always arise. But that’s not the time for building relationships. For those messy situations, it is paramount to have transparent and collaborative working relationships already ingrained internally with third parties and with key stakeholders so that conflicts can be raised and resolved quickly and effectively to minimize potential damage to value and reputation.  

What and when to invest – Secret Sauce #2.

Every organization faces the same challenge of limited resources and even less time. As such, compliance needs often are put on hold. So, with everyone vying for a piece of the same budget, it becomes critical that quality/compliance is able to effectively justify what and when to invest in the context of the overall business plan. Being able to project the return on that investment almost always beats the costs of non-conformances.

Alignment of rewards, recognition, selection, and promotion. 

Culture can be defined as what’s done and not done, what’s said and not said, and the resulting consequences. So, in considering the role of corporate culture in navigating compliance risks, remember that what gets rewarded gets done.  

	Regulations and legal interpretations are always evolving in the fast-paced world of innovative life sciences. Navigating compliance risks requires so much more than policies and procedures. For the large pharma player or the startup, it involves all of the strategies mentioned and more to get out in front of potential issues before they become significant pain points-thereby creating a competitive advantage for the business and more predictability and confidence for the key stakeholders. 

is President and Founder of ThinkQuality, LLC. He can be reached at 

How navigating compliance risks requires so much more than policies and procedures.

A Seat at the Strategy Table

	FDA is overhauling its new drug review process and launching new pilots and strategies to modernize clinical research and data analysis in order to move more cutting-edge therapies through the regulatory process to patients. Reports of positive outcomes and extended benefits from targeted cancer treatments at the June

 meeting of the American Society of Clinical Oncology (ASCO) generated great enthusiasm for genetic analysis and immune marker testing to better match treatment to disease markers in the growing field of precision medicine. New incentives, moreover, promise to encourage the development of much-needed antibiotics, and gene and cellular therapies are emerging from initiatives to streamline testing and oversight of innovative biologics.

	While biopharma companies and the research community applaud these efforts, skeptics continue to raise concerns that long-term safety risks, unsure efficacy, and high price tags may limit benefits and keep important treatments out of reach for many individuals (see sidebar at bottom). FDA Commissioner Scott Gottlieb maintains that less costly clinical research and faster approvals should boost competition in pharmaceutical markets and bring down the cost of many important drugs in the process. 

 FDA efforts to keep pace with medical innovation through updates in clinical trial operations, regulatory policies, and manufacturing standards to create a more efficient, less costly and more innovative review process. For example, FDA is testing a program that permits reviewers to assess a sponsor’s clinical trial data before the application is filed to  ensure that submissions contain all relevant information needed for a timely review. Another strategy involves creating a common review template for both FDA staffers and applicants to record comments and answer questions, avoiding multiple parallel review documents.

	There’s also great excitement over the emergence of new cellular and gene therapies, with three innovative products on the market and analysts reporting more than 500 in early development. FDA’s Center for Biologics Evaluation and Research (CBER) has established policies and procedures for overseeing treatments that qualify for the Regenerative Medicine Advanced Therapy (RMAT) designation, and CBER plans to issue further guidance documents to clarify manufacturing and testing policies, starting with hemophilia treatments. Because these therapies target devastating diseases, FDA expects to approve promising products based on surrogate measures, with post-market studies using registries and real-world patient evidence to document continued benefit or safety issues. CBER also seeks to clarify ways to deal with the complex production and scale-up issues for these biotech therapies that often delay product approval and marketing. 

	While scientists are pursuing extensive research to treat cancer and genetic diseases, efforts to combat the spread of drug-resistant infections have been limited, as R&D difficulties and financial impediments have discouraged development of innovative antibiotics and antimicrobials. A new research strategy may help, as seen in recent FDA guidance on how manufacturers may utilize streamlined research methods and accelerated approval policies for therapies that qualify for the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD). 

	To spur industry investment in this field, Gottlieb recently proposed a licensing model with a “pull incentive” to ensure manufacturer reimbursement for new infectious disease treatments. The idea is that hospitals and clinics would pay a fixed licensing fee to access a certain volume of doses of the new medicine, creating predictable revenue for the developer, while discouraging excessive use of the new treatment that often leads to resistance.

	These R&D initiatives aim to further tap patient expertise on evaluating burden of disease and treatment preferences in designing research strategies. FDA has moved over the last decade to achieve a more systematic approach for incorporating patients’ experiences into the clinical testing process and continues to seek better ways for measuring and collecting patient experience data, such as registries to identify in advance those patients who meet enrollment criteria. Initiatives to advance precision oncology treatments involve assessing patient-reported outcomes (PROs) in cancer trials and FDA use of PRO data in regulatory review. 

	The agency recently published the first of several guidances that aim to further utilize patients’ perspectives in drug development. This 

 recommends methods for collecting patient data in clinical trials, and additional guidances will provide more specifics on using interviews and survey information, on identifying issues most important to patients, and in selecting patient-focused study endpoints. The overall goal is to map out sound methodology for collecting patient input so it provides valid data that can inform regulatory decisions. 

Maintaining a speedy, efficient new drug review process is vital to FDA’s success in encouraging innovation and speeding new breakthrough therapies to patients. To be able to assess the growing volume of promising new drugs and biologics in accelerated and compressed timeframes, the Center for Drug Evaluation and Research (CDER) is overhauling its Office of New Drugs (OND).  

	Janet Woodcock, CDER director, has led the reorganization initiative this past year, with an eye on encouraging team-based reviews and systems to make the oversight process more efficient and consistent. A “flatter” OND will have nine instead of five drug review offices, with up to 30 specific review divisions. CDER staff must deal with a “staggering pace of work,” Woodcock said, and that involves attention to detail and keeping up with emerging scientific advances in genomic medicine, targeted therapy, digital health, drug-device combinations, and more global drug development programs. 

’s Washington Correspondent. She can be reached at 

Streamlined clinical research, more guidance speed new cures to patients.

Regulatory Innovation Generates Breakthroughs

	There has been a great deal of interest in China on the biopharmaceutical and healthcare fronts for quite a while and that interest continues to escalate. If you go back in history, it was not long ago that China was principally a low cost, low quality producer of pharmaceutical intermediates and fine chemicals, along with many companies from India. Subsequently, there was a forced clean-up of manufacturing practices that significantly improved the reputation of Chinese-sourced active pharmaceutical ingredients (APIs) and fine chemicals. The Chinese pharma firms were also producers of traditional Chinese drugs and many generic pharmaceuticals for local and international consumption.

	Since then, the Chinese have moved up to be more global producers of generic drugs and are beginning to manufacture and even develop more sophisticated medicines, some of which are proprietary to the Chinese biotech or pharma companies. There are even increasing numbers of Chinese biotech and pharma organizations that are conducting clinical trials for drug candidates in China and the US simultaneously.

	On the regulatory front, it has been a bumpy road for the Chinese FDA as it struggled to develop and implement standards and approval procedures that were appropriate for the Chinese market and increasingly in line with the US FDA and the European Medicines Agency (EMA). There is increasing respect for the Chinese regulatory system now in China and abroad. Also, as is the case for the US FDA, the Chinese FDA is trying to streamline its approval process without compromising science and public safety. 

	In terms of the Chinese healthcare market, the attraction of a very large population has always drawn a great deal of interest on the part of both Chinese and Western providers of drugs. China has gone from a system with no healthcare insurance and a hospital-centric healthcare system to the introduction of healthcare insurance and a more diversified, modern system of providing patient care.  

	Lastly, the Chinese are trying to create the very delicate ecosystem that exists in selected parts of the world that is required to attract leading researchers, develop drugs successfully, establish and fund biotech companies, and provide the providers of capital with the liquidity and valuation increases that are critical to the success of biopharmas in the West.

	The history of new drug development ecosystems in various cities and countries around the world has had a very mixed record of failures and successes. The number of regions that have tried and failed is significant. Those that have studied this phenomenon believe that there is a delicate balance of strong research universities; government-sponsored research organizations (such as NIH and DARPA in the US); pharma companies with the right mix of tools and people; funding sources at every stage of product development of a biotech; a regional stock market that will support emerging biotechs; and the right living environment that can attract the best researchers.

	China has been working very hard to try to create successful biotech/drug development ecosystems in various locations in China. These efforts include massive funding focused on graduating large numbers of university-trained Chinese scientists, encouraging the growth of venture capital and private equity funds that can invest in Chinese biotech/pharma, and the recent designation of biotech as one of the targeted industries that Chinese wants to achieve an independent major position in by 2025. Other targeted industries include robotics, aircraft, and electric cars. 

	In addition, the Chinese government changed the rules with regard to IPOs in Hong Kong that allow biotech and technology companies that do not have revenues to go public, subject to certain rules and restrictions, on the Hong Kong exchange. Previously, companies without revenues could not go public in China on any of the exchanges, and the only option for Chinese biotechs to go public was in the US or Europe via an IPO or reverse merger. It is not yet clear how many Chinese biotechs will go public on the Hong Kong exchange, but there is no question that the public market valuations in China across many industries are substantially higher than those in the West. Whether this is sustainable or not is not clear. However, for the moment, it does give Chinese companies that are public a clear advantage in terms of their cost of equity. 

	It is not yet certain whether the Chinese government and pharma/biotech community will achieve the targeted goal by 2025 or, more importantly, whether it will be able to create successful and stable ecosystems. It is clear that the Chinese are very intent on trying.

	The list of opportunities for both Chinese and Western pharma and biotech companies is substantial. To start, the Chinese market for drugs is mushrooming and the incentives to sell existing and new drugs into the Chinese market are high. Although there are pricing, intellectual property, distribution, and regulatory issues to deal with, the overall opportunity is positive, but very much driven by the specifics of each drug and company. 

	In addition, with many now established Chinese biopharma companies, Western drugmakers are regularly partnering or licensing product candidates or US-approved treatments with Chinese organizations. The other opportunity is that there are an increasing number of new drugs that are being developed by Chinese companies where the clinical trials and marketing in the US or Europe will be better handled by a Western biopharma company with regional regulatory expertise, in-place sales and marketing resources, and, if needed, funding. 

	Lastly, although the revision of the Hong Kong Stock Exchange IPO rules will primarily benefit Chinese biotech IPOs, it will also be open for dual listings by Western biotechs, which could enable access to more Chinese investors.

	There are also threats, although the list is not as long as the opportunities. The obvious threat is the potential for Chinese biopharma companies to eventually become aggressive competitors in the more attractive therapeutic areas, aided by government support; looser standards around issues such as the use of genetic engineering; easier availability of private and public equity funding at higher valuations; and the dramatic increase in university research and graduates. 

	The Chinese have clearly gained significant market share in pharmaceutical intermediate/fine chemicals and generics manufacturing. Whether they can do the same over time in the market for more sophisticated drugs is still an open question, but it is clear that the Chinese government wants the Chinese biopharma industry to achieve that goal.

is President and Managing Director of Young & Partners, and a member of 

’s Editorial Advisory Board. He can be reached at young@youngandpartners.com

Exploring the prospects-and related challenges-for Chinese life science as it aggressively pursues new growth areas. 

China’s Biopharma Rise: Opportunities and Threats

	“Over the past few decades, the Indian pharmaceutical industry has established itself as a global powerhouse for the production of bulk drugs and generics which have gained dominant market shares in the world’s most strategic markets and tremendously bolstered healthcare affordability and accessibility on all continents,” states Suresh Prabhu, India’s Minister of Commerce & Industry and Civil Aviation. “India is undoubtedly a significant player in the global marketplace, representing an important source of FDA-regulated products,” confirms Dr. Letitia Robinson, director of the India Office of the US FDA, which was set up in New Delhi in 2008.

	When it comes to fine chemicals and pharmaceuticals, India's growth is impressive: “with 573 approved facilities, India continues to have the highest number of US FDA-registered manufacturing facilities outside the US, while over 800 are UK MHRA approved, and approximately 1,400 manufacturing units are WHO GMP (Good Manufacturing Practices) certified,” highlights Dilip G. Shah, secretary-general of the Indian Pharmaceutical Alliance (IPA).

	Thanks to the Indian ecosystem’s remarkable expertise in reverse engineering and its unrivaled capacity to provide health systems around the world with large volumes of affordable generic drugs, Indian pharmaceutical exports have skyrocketed from USD 3.9 billion in 2004 to around USD 17 billion today, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil), while Indian companies make up 25 percent of the US generic market share.

	"A question that I have asked myself is where do we go from here?" says Murtaza Khorakiwala, managing director of homegrown entity Wockhardt. "Is it better to be growing by 45-55 percent or be entering other areas as well-such as the development of new molecules, biosimilars, and biotechnology. I believe this is the next wave of the Indian pharma industry.”

To view the full article on India's evolving healthcare and biopharma markets, produced by Focus Reports and featured in Pharm Exec's July 2018 issue, click 

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The Indian pharmaceutical industry is traditionally known as a global powerhouse for the production of bulk drugs and generics, but less heralded is the growth India has made on the pharma world stage in several other areas, including biotechnology and R&D.

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