Finance

Why does digital India need drug firms to engage intermediaries for regulatory nod?


Digital India and its cyber-motorways crisscrossing the nation riding on the theme song ‘minimum government and maximum governance’ should normally be free from speed bumps of dirty money or discretionary powers. Yet, India Inc., and in particular its pharmaceutical industry, is today grappling with the aftershocks of allegations of bribe-taking and bribe-paying.

In the spotlight is a very senior official in the office of Indian drug controller and a leading Indian biopharmaceutical company.

On June 20th India’s federal investigating agency, the Central Bureau of Investigation (CBI) apprehended the joint drug controller of India and the director of a consulting firm acting as an intermediary in regulatory affairs for Biocon Biologics, the subsidiary of the leading biopharmaceutical company Biocon.

Financial Express Online learns that not only  many in the industry are aware of the “consultant” in question but either seem to know her personally or having engaged the services of the consultant. The bigger point is that the practice of hiring consultants seems par for the course. The idea being to have intermediaries who can help deal with the regulatory affairs for a company seeking regulatory approvals.

Officially, the hiring of consultants/intermediaries  seems to be with all the right intent on paper and this being largely to leverage their expertise in regulatory matters (read: know your regulatory officer or the file pathway within the system and to do all the required follow-ups). This is then safeguarded by all the right words and clauses, including those against bribery, all encased within the signing documents with the consultants. But then, there is little known on what is done to enforce these for it is not as if the role and conduct of intermediaries is completely unknown to the companies that engage them. Or, why else would one pharma industry leader (who did not want to be named like most others) point out: “even if companies try to play safe it is not necessary that consultants would in all cases operate with the full knowledge of the company.” 

Will it all change now? One learns that Biocon has now engaged an international law firm to review its governance processes involving consultants and vendors and to seek ways to enforce anti-bribery provisions. One also gathers that other companies have started either questioning their consultants or wanting to terminate their services or as one company official put it “effectively the contract is scrapped now.”

Whatever may be the approach, the recent incident, which some call as “perhaps one that got exposed” speaks more about the larger malaise in the regulatory system administration and is clearly a call for some urgent measures to overhaul the system. To the companies, there cannot be a more clear writing on the wall on why staying watchful on this issue matters.  

But then, why do pharma companies need to engage intermediaries? Talk to those in the pharma industry and it is often gripe about the regulatory maze, slow administrative process that needs file-pushers, the component of subjectivity and the manner in which deliberations (of say a subject expert committee) are recorded and minutes published, the scope for discretionary powers by a committee.

For instance, one industry leader points out that while similar approvals with almost identical phraseology were given in the past like for instance one in May 2022 and in July 2021 where in the case of a global MNC and an Indian company mention is made of allowing the firm to undertake phase IV clinical trials and to submit the protocol. The worrying element is that of subjectivity with approvals with cases where even trial protocols were changed without even the prior-approval of the drug regulator and these were later approved. 

Then, there is the dimension of timing. Some in the industry point out that S Eswara Reddy, the joint drug controller, who is now under the CBI scanner, was in fact slated for promotion and therefore those sympathetic to him allege that perhaps he was framed. By whom and why? And without getting into all the thorny questions, the fact remains that whatever the circumstances, any official from the regulatory agency ought to know why staying above board is critical so, like Caesar’s wife, they can remain above suspicion and therefore never having to be in a situation that gets him or her under the scanner of an investigating agency for wrong-doing.

Then, there is a larger question of competence and scientific rigour, both within the investigating agency and among the experts that are made the members of the various regulatory committees, the robustness of the process and the accountability, with much distance to be covered in each case.

For instance, one head of a pharma company points out that usually the experts are government doctors and not necessarily those who would have presided over global clinical trials with deep knowledge on all elements from toxicology, protocols for clinical trials to chemical manufacturing expertise. Finally, some also point to gap in proper review  mechanism and the process of appeal. One industry leader in fact feels, now there is a strong case for an independent observer at many of the committee meetings by the regulatory authority with the observer reporting directly into the health ministry on the meetings and in the way they are conducted.

Finally, there is also the aspect of lack of clear timeframes for approvals. For instance, in the case in question while the subject expert committee met on May 18th and put out the minutes the very same day, the letter from the regulator has yet to reach the company. Financial Express Online learnt that at least it had not happened till June 20th when the news of the CBI raid was out.

But then, the head of a leading pharma company, points out that the regulatory delays seem to have become a norm. Why else would a regulatory approval for a New Chemical Entity (NCE) in India take between 30 to 60 months as against less than 18 months abroad or the approval for a biosimilar take anywhere between 30 months to 70 months while it could be obtained in less than two years abroad.

The final big lesson for the Indian pharma industry is that the need to ask why the same event can be presented in two completely different ways. The investigating agency implying that an official was exerting undue influence on the outcome of a meeting while the minutes of that very meeting put out by the regulator terms the final findings as a result of “detailed deliberation.”

For those keen on the exact words in the minutes put out by the CDSCO (Central Drugs Standard Control Organisation) on May 18th: “The firm presented proposal for import and marketing of the drug with waiver of Phase III clinical trial in the country. The firm presented detailed proposal along with CMC, pre-clinical and clinical trial data. The committee noted that the firm has conducted Phase I and Phase III trial with the drug in Germany and USA respectively and based on the results of the trial, the drug has been granted marketing authorization by EMA and Health Canada. After detailed deliberation, the committee recommended for grant of permission to import and market the drug with waiver of Phase III clinical trial in the country with the condition that firm should conduct Phase IV clinical trial in India (which also includes a sub-set population to generate PK/PD and immunogenicity and submit the protocol to CDSCO before placing the drug in the market) as per existing guidelines in the country.”


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