Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

As the industry waits for a final US regulatory pathway for biosimilars, state legislation affecting the dispensing of biosimilars is being debated in several states, once again drawing the battleground between the innovator-drug and generic-drug industries. 

On Apr. 8, 2013, the state legislature of Maryland failed to move forward legislation that would have authorized pharmacists to substitute biosimilars for prescribed biological reference products only under specified circumstances. It also would have required pharmacists to give specified notices and record specified information if a pharmacist substituted an interchangeable biosimilar biological product for a prescribed biological reference product. 

The legislation’s defeat was welcomed by the Generic Drug Pharmaceutical Association (GPhA). “We applaud the Maryland state legislature for making this wise decision,” said Ralph G. Neas, GPhA president and CEO, in an Apr. 10, 2013 statement.  “...Maryland legislators know that passing laws requiring unnecessary notification and recordkeeping would create ‘red tape’ between patients and affordable medicines. We agree with the Maryland Department of Health and Mental hygiene, which in opposing this legislation, called it premature and unnecessary at this time.”

At issue in the defeated Maryland bill and in other state legislation is whether to include requirements for physicians and pharmacists on biological substitution. The Patient Protection and Affordable Care of 2010, the landmark healthcare reform package signed into law (Public Law 111-148) by President Barack Obama on March 23, 2010, authorized a regulatory pathway for biosimilars (1). In February 2012, FDA issued three draft guidances relating to biosimilars (2-4), but these guidances have not been finalized. The approval pathway, as established by the federal law, distinguishes between biologic products that are “biosimilar” to an innovator biologic, meaning they are “highly similar” to an innovator product, and biologic products that meet a heightened standard to be deemed “interchangeable” (5). Although FDA’s role in the approval of biologic and biosimilar medicines includes the designation of an interchangeable status, the policy on whether one biologic product may be substituted by dispensers when a different biologic product was prescribed is governed by state law (5), and it is that issue that has engendered the recent debate.

In January 2013, the Biotechnology Industry Organization (BIO) issued its “five principles on biologic substitution,” a framework that it recommends that states follow in adopting policy on biological substitution. The BIO principles call for substitution only when FDA has designated a biologic product as interchangeable, authorizes prescribing physicians to prevent substitution, requires both the prescribing physician and patient to be notified of substitution, and requires the pharmacist and the physician to keep records of the substitution. 

 Although Maryland did not move forward legislation that would have included such provisions, other states have passed such legislation or are considering it. In late March, North Dakota signed into law requirements related to the interchangeability of biological medicines. Virginia and Utah also have passed such legislation although the measures contain sunset provisions for when the measures would expire. Nine other states are considering legislation: California, Colorado, Illinois, Indiana, Florida, Massachusetts, Oregon, Pennsylvania, and Texas, according to GPhA. GPhA notes that Arizona, Mississippi, and Washington State have declined to pass legislation until FDA has issued final guidance and that the Arkansas state legislation has referred such legislation to a study committee for further consideration. 

www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/

Draft Guidance for the Industry: Scientific Considerations in Demonstrating Biosimilarity to a Reference Product 

 Draft Guidance for the Industry: Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product

Draft Guidance for the Industry: Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

BIO Principles on Patient Safety in the Substitution of Biologic Products

Articles

Maryland is the latest state to consider whether to include additional requirements for substitution of biological products

State Legislatures Become Battlegrounds for Biosimilars

Emerging markets are an important part of the pharmaceutical majors' growth strategy. As these markets become of increasing strategic value,  pharmaceutical companies are ramping up investment in R&D and  manufacturing (API and finished drug product) in these areas.  

Emerging markets are playing an increasingly important role in overall pharmaceutical industry growth. The global market for medicines is expected to rebound from a recent low of 3-4% growth in 2012 to 5-7% growth in 2016, according to a July 2012 analysis by the IMS Institute for Healthcare Informatics. Growth will primarily be from emerging markets as growth in established markets in the United States, Western Europe, and Japan remains weak comparative to historical levels. Overall, annual global spending on medicines will rise from $956 billion in 2011 to $1 trillion by 2013, and to nearly $1.2 trillion in 2016, representing a compound annual growth rate (CAGR) of 3% to 6%. For purposes of the IMS analysis, spending is reported as ex-manufacturer prices and does not reflect off-invoice discounts and rebates and is converted from local currencies to US dollars. Absolute growth in global pharmaceutical spending between 2012-2016 will be between $220 billion and $250 billion, compared with $298 billion in the prior five years. 

Growth in annual global spending is forecast to more than double in 2016 to as much as $70 billion, up from a $30-billion pace in 2012, driven by volume increases in what IMS terms the "pharmerging" markets and some uptick in spending in developed nations. The "pharmerging" markets are defined by IMS as countries with greater than $1 billion in absolute spending growth between 2012-2016 and that have gross domestic product per capita of less than $25,000 at purchasing power parity. Using that criteria, China is classified as a Tier-1 country, and Brazil, Russia, and India as Tier-2 countries. Tier 3-countries are Mexico, Turkey, Poland, Venezuela, Argentina, Indonesia, South Africa, Thailand, Romania, Egypt, Ukraine, Pakistan, and Vietnam.  

IMS projects that healthcare systems in pharmerging markets will nearly double their medicine spending over the next several years. Annual spending on medicines in the pharmerging markets will increase from $194 billion in 2011 to between $345 billion and $375 billion by 2016, or $91 in drug spending per capita, according to IMS. The increase will be driven by rising incomes, continued low cost for drugs, and government-sponsored programs designed to increase access to treatments. Generic drugs and other products, including over-the-counter medicines and diagnostics will account for approximately 83% of the increase.  

Among the emerging markets, the BRIC (Brazil, Russia, India, and China) countries represent the largest areas of pharmaceutical industry growth. China's pharmaceutical market was valued at $66.7 billion in 2011 and is expected to reach between $155 billion and $165 billion by 2016, representing a CAGR of 15% to 18% between 2012-2016, according to IMS. Brazil's pharmaceutical market was valued at $29.9 billion in 2011 and is expected to reach between $42 billion and $52 billion by 2016, representing a CAGR of 12% to 15% from 2012-2016. Russia's pharmaceutical market was valued at $15.7 billion in 2011 and is forecast to be between $23 billion and$33 billion by 2016, representing a CAGR of 10% to 13% from 2012-2016. And India's pharmaceutical market was valued at $14.3 billion in 2011 and is expected to reach between $24 billion and $34 billion by 2016, representing a CAGR of 14% to 17%, according to IMS.  

Based on these projections, China will move into second place in the global pharmaceutical market by 2016, surpassed only by the United States, which will continue to hold the number one position on a global basis, according to IMS. Brazil will move into fourth place, India into eighth place, and Russia into ninth. Among developed markets, Japan will drop from the second largest global market to the third by 2016. Germany and France will each drop a notch, from fourth and fifth, respectively, in the global rankings in 2011, to fifth and sixth in 2016 as projected by IMS. Italy will stay in seventh spot in 2016, the same position it occupied in 2011. The developed markets of Spain, Canada, and the United Kingdom, respectively ranked as eighth, ninth, and tenth in 2011, will be eclipsed by Russia and India in the global rankings by 2016, according to IMS projections.  

. The pharmaceutical majors are pursuing direct investment in R&D and manufacturing as well as partnership strategies in emerging markets (1-2). Some recent investment in China by the pharmaceutical majors includes  Hisun-Pfizer Pharmaceuticals, a joint venture formed between Pfizer and the Chinese pharmaceutical company Zhejiang Hisun Pharmaceuticals with the aim to develop, manufacture, and commercialize off-patent pharmaceutical products in China and other  markets. In May 2012, Sanofi inaugurated a new assembling and packaging line for producing its prefilled insulin injection pen Lantus SoloStar at its facility in Beijing. The company announced a second phase $90-million project to install a cartridge aseptic product line at the facility. 

Novartis has been actively building its position in China. In 2007, Novartis opened a start-up facility for a new R&D center in Shanghai, China, and broke ground in 2008 on Phase I of a new facility that was originally to be home to approximately 400 R&D scientists and approximately 400 other pharmaceuticals division personnel. In 2009, it expanded the scope of the site with plans to invest $1 billion during the next five years to increase the size of its operations in Shanghai. Based on a re-evaluation of the site conducted in 2010, the current Phase 1 has been extended by two buildings. The cross-divisional Shanghai campus will house 800 offices and 400 laboratory workplaces 

In 2012, Eli Lilly opened a new diabetes R&D center in Shanghai. The center employs 150 scientists and staff hired primarily from China. Eli Lilly also is constructing a new insulin production, packaging, and warehouse facility in Suzhou, China, which was schedule to open in late 2012. In June 2012, Eli Lilly announced an expansion of its manufacturing capabilities in China through an expanded collaboration with Novast Laboratories, a generic-drug and specialty pharmaceutical company based in Nantong, China. The collaboration will enhance Lilly's efforts to build a portfolio of Lilly branded generic medicines in China, and eventually may be used to provide regional manufacturing support for Lilly's pipeline of products in development. 

For Roche, a key project included transforming its manufacturing facility for solid dosage forms in Shanghai from a local to a global supply operation. In early 2011, the facility received FDA and EMA approvals to produce Xeloda (capecitabine) for the US and EU markets. 

Unlike other BRIC countries, such as India and China, which have a domestic manufacturing base, Russia is largely dependent on pharmaceutical imports. Its domestic biomedical industry accounts for only 0.2% of the global market, but the country is committed to change that level through an ambitious program, Pharma 2020. Pharma 2020, a state-initiated plan, seeks to boost output of local medicines from 25% of gross sales in 2010 to 50% by 2020, upgrade domestic pharmaceutical manufacturing operations to GMP standards, and increase the level of innovator pharmaceuticals in the Russian market (3). Several pharmaceutical majors are increasing their presence in Russia with manufacturing and R&D investment (1-2). 

In September 2012, Takeda Pharmaceutical completed construction of a EUR 75 million ($99 million), 24,000-m

  pharmaceutical manufacturing facility in Yaroslavl, Russia. The plant, which is approximately 280 kilometers from Moscow, is one of the first by a major multinational company in Yaroslavl's pharmaceutical cluster. The facility is expected to be fully operational by 2014.  

The Yaroslavl facility will enable Takeda to meet demand in Russia initially for several products: Cardiomagnyl (acetylsalicylic acid and magnesium hydroxide), Actovegin (derived from calf blood), and calcium tablets. The plant will have the initial capacity to manufacture 90 million sterile ampuls and more than two billion tablets per year. Liquid-sterile production includes solution preparation, washing of ampuls, sterilization, filling, inspection, and packaging. Solid production will encompass all stages, from weighing, mixing, and granulation through compression, coating, and packaging. Takeda estimates that it is the seventh largest pharmaceutical company in Russia and expects company annual growth rate of 15% in Russia through 2016.  

In April 2012, Novo Nordisk broke ground on a new $100-million plant in Russia that will formulate and fill insulin into Novo Nordisk's Penfill cartridges and pack the FlexPen prefilled insulin delivery device for the Russian market. Located in Grabtsevo Technopark in the Kaluga region, the plant is expected to start manufacturing in 2014. The company's intention to establish insulin production in Russia was first announced in 2010. At that time, an agreement of cooperation between the government of the Kaluga Region and Novo Nordisk was signed. Sanofi also recently increased insulin capacity at its facility in Orel, Russia. Sanofi obtained the facility following its acquisition of a controlling stake in the pharmaceutical company Bioton Vostok in 2010. 

Novartis is proceeding with a new $140-million manufacturing plant for pharmaceuticals and generic drugs in St. Petersburg, Russia. The plant is expected to produce approximately 1.5 billion units per year (oral solid dosage forms). The greenfield facility is in the Novoorlovskaya Special Economic Zone located to the north of the St. Petersburg city center. Novartis began construction of the facility in 2011. The facility is expected to be completed and approved for commercial production in 2014. 

The facility is part of a five-year, $500-million investment into Russian healthcare infrastructure announced by Novartis in December 2010. This plan addresses three core areas: local manufacturing, R&D collaborations, and public health development in Russia. These activities include collaborations with academia and emerging Russian private businesses in different areas of medical science. The scope of these collaborations may include efforts, such as out-licensing of Novartis compounds to Russian companies with proven scientific capabilities, in-licensing and scouting for promising drug candidates from Russian scientists and universities, and modeling and simulation activities for clinical trials. Novartis is working in all of these areas to identify high potential projects to be jointly developed. Additionally, Novartis also has made a commitment to double its investments in drug development in clinical trials in Russia and expects to enroll approximately 4000 individuals by 2013, said the company in announcing its plans in December 2010. 

In 2011, AstraZeneca announced plans to establish a Predictive Science Center in St. Petersburg, the company's first such center in Russia. The center will focus on developing bioinformatices, data-analysis methods, software, and systems to evaluate safety and efficacy of new drugs. Approximately 30 people will be employed at the center through local collaborations and organizations. Also in 2011, AstraZeneca began construction of a new $150-million manufacturing facility in the Kaluga region in Russia to supply locally produced medicines. The company also has partnerships with several R&D institutes in Russia, including the  Skolkovo Innovation Center and Russia Venture Company, for research and clinical trials. 

In July 2012, Pfizer granted exclusive development and marketing rights to the Russian firm SatRx for its dipeptidyl peptidase-4 (DPP-4) inhibitor PF-00734200 for Type 2 diabetes.SatRx, which is part of the ChemRar Hi-Tech Center, received worldwide rights (excluding China) to the drug as a monotherapy or in combination with other diabetes drugs. Pfizer will receive royalties and milestone payments based on commercialization activities. The agreement was developed as partial fulfillment of a memorandum of understanding reached in March 2011, under which Pfizer and ChemRar agreed to explore collaborations focused on research, development, and commercialization of compounds and vaccines to treat cardiometabolic, infectious and oncologic diseases in Russia and other countries. 

In 2010, GlaxoSmithKline formed an alliance with JSC Binnopharm for the local secondary manufacture of several GSK vaccines. Under this alliance, which was announced in November 2010, GSK is supplying bulk vaccine and providing technology and expertise to enable Binnopharm to undertake the secondary manufacture, including filling and packaging of GSK vaccines. Binnopharm will be responsible for gaining approval of their facilities to allow supply of GSK cervical cancer, rotavirus, and pneumococcal vaccines under Binnopharm's trademark for the Russian public market. 

	3.	G. Peach, "Russia Pledges $4 billion for Pharma-2020 Plan," 

As the strategic value of emerging markets increase, pharmaceutical companies increase their R&D and manufacturing investments.

Navigating the Global Manufacturing Supply Chain

Eli Lilly is considering investing an additional $180 million in the company's insulin-manufacturing operations in Indianapolis, Indiana. The investment is in addition to the company's November 2012 announcement of a $140-million expansion of the company's insulin-manufacturing operations in Indianapolis. Lilly also is proposing several other ancillary investment projects totaling approximately $80 million, including a $40-million product-inspection center.

The latest $180-million proposed investment encompasses two parts. The first part would add a second insulin cartridge-filling line to the company’s previously announced expansion. In November 2012, Lilly announced that it was investing $140 million to expand its Indianapolis facility to support the manufacturing of insulin cartridges with completion targeted for March 2014 and operations beginning in 2015.  The new proposed investment would add an additional insulin-cartridge-filling line with target completion by 2016. Filling insulin cartridges is a new technology for Lilly's US manufacturing operations. Lilly sites in the US currently only fill insulin vials, which are used with a traditional syringe or an insulin pump. Cartridges are used in insulin pens.

The second piece of the proposed $180-million investment would increase the company’s insulin-active-ingredient manufacturing capacity. The investment is designed to increase productivity without building a new manufacturing plant or adding to its cost structure. Construction work in the insulin-active-ingredient production area could be completed by December and operational by March 2014, according to the company. 

Once operational, approximately 175 full-time technicians, scientists, and engineers would be needed to manage operations in the cartridge-filling and insulin-active-ingredient manufacturing areas. Eli Lilly is working with the city of Indianapolis on its investment proposal. 

Company considers investment in insulin cartridge-filling and insulin API manufacturing capacity in the US.

Eli Lilly Considers Investment in US Insulin-Manufacturing Capacity

King Pharmaceuticals, a wholly owned subsidiary of Pfizer, has initiated a voluntary recall of  Levoxyl (levothyroxine sodium), which is used to treat hypothyroidism and certain types of goiter. 

The company initiated the recall after learning of complaints from pharmacists and patients of an uncharacteristic odor coming from Levoxyl bottles. It was determined that the odor was caused by an oxygen-absorbing canister added to 100- and 1000-tablet pharmacy bottles to enhance the stability of the product, according to a company 

“Pfizer conducted a careful health assessment of the situation and concluded that this odor is not likely to cause any adverse health consequences,” said the company in its statement. “However, the company discussed this situation with the US Food and Drug Administration and decided, out of an abundance of caution, to voluntarily recall the product at the retail level.” 

Levoxyl is an oral tablet used used as replacement or supplemental therapy in low thyroid function (hypothyroidism) of any cause, except transient hypothyroidism during the recovery phase of subacute thyroiditis. It is also used in the treatment or prevention of certain types of goiters and, as additional therapy, in the management of a specific thyroid cancer. 

 King Pharmaceuticals and Pfizer said they are working to resolve the issue as quickly as possible although it is anticipated that the company may not be able to restart production until 2014. The 

 was posted on FDA’s Drug Shortages website as well. 

Company issues voluntary recall after learning of complaints of an uncharacteristic odor coming from Levoxyl bottles.

Pfizer Voluntarily Recalls Levoxyl

 As more companies try to ensure that their validation activities are compliant and cost-effective, it has become increasingly important for quality professionals and validation technicians to manage costs and reduce downtime by accurately evaluating their validation equipment needs. This is particularly the case in validation/mapping studies. 

Optimizing Validation/Mapping Studies for GMP Compliance

,”  on Wednesday April 10th at 11:00 AM EST to address this issue.

				The 30-minute webcast will give participants a solid understanding of how to place sensors in thermal validation studies based on current regulatory guidance and scientific principles by providing a tutorial on how to determine the number and placement of sensors during validation/mapping studies. The webcast will discuss environments of all sizes: tabletop incubators, small refrigerators, cold rooms, and warehouses.

				The panelists include Charles Lankford, CEO and co-founder of the life-sciences consulting firm PharmaSys, Inc., where he provides strategic direction for the company and acts as a senior auditor/consultant. He has served as validation project manager for a multitude of projects and has performed numerous compliance audits of laboratories, clinical research organizations, and manufacturing facilities. He is recognized as an authority in the fields of validation, FDA regulations, BE/BA studies, and quality assurance with more than 30 years of experience, which has included assignments with Johnson & Johnson, Burroughs Wellcome and Glaxo Wellcome (now GlaxoSmithKline).

				Also speaking will be Paul Daniel, senior regulatory compliance expert, Vaisala, who has more than 15 years of validation experience in the pharmaceutical and medical-device industries. He has worked on a wide range of qualification projects, including process, cleaning, shipping, laboratory equipment, packaging, software, network and computer validation. He has an extensive practical grounding in applying the GMP principles found in 21 

Parts 11, 210, 211, and 820. His specialties include: authoring and executing validation protocols (IQ and OQ) for pharmaceutical manufacturing and software validation with a risk-based approach drawn from GAMP guidelines.

				Registration and additional information for the webcast may be found 

As more companies try to ensure that their validation activities are compliant and cost-effective, it has become increasingly important for quality professionals and validation technicians to manage costs and reduce downtime by accurately evaluating their validation equipment needs

QA/QC Focus: Validation/Mapping Studies

The latest Access to Medicine Index, which ranks the top 20 pharmaceutical companies on their efforts to improve access to medicine in developing countries, finds that the industry is doing more than it was two years ago, the last time the index was published. GlaxoSmithKline continues to hold the top position followed by Johnson & Johnson and Sanofi 

The Access to Medicine Index is published by the Access to Medicine Foundation, a nonprofit organization based in the Netherlands. The index methodology was developed and is continually refined in consultation with multiple stakeholders, including the World Health Organization, nongovernmental organizations, governments and universities, as well as 30 institutional investors. The index is funded by the Bill & Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs, the UK Department for International Development, and other charitable organizations. It scores companies on their commitments, performance, innovation and level of transparency across seven areas of activity considered key to improving access to medicine. The companies are graded on more than 100 factors covering these areas, including whether they are developing new drugs for neglected diseases, to what extent they facilitate or resist efforts to create generic versions of their drugs, and how they approach pricing in developing countries. Lobbying activities, marketing ethics, product donations, and other philanthropic activities are also tracked. 

GlaxoSmithKline remains at the top of the index with a marginal improvement in performance since 2010. Johnson & Johnson and Sanofi, both new to the top three, closely follow in the second and third positions, respectively. The companies that rose in rank the most were Merck KGaA, followed by Johnson & Johnson, and tBayer. AstraZeneca fell down the rankings most significantly, followed by Boehringer Ingelheim,  Novartis, and Roche. The bottom of the rankings is  dominated by Japanese companies Takeda, Daiichi, and Astellas. 

The index found that Johnson & Johnson was one of the most dramatic risers, climbing from the middle of the field in ninth position in the 2010 rankings to second this year, closely behind GlaxoSmithKline. Its rise is due largely to its consolidation of its access activities under one business unit, which has resulted in a more strategic and integrated approach, and to its acquisition of vaccine maker Crucell, which has increased the relevance of its R&D investments. It has also disclosed more overall about its access activities. 

 Sanofi has a proactive approach to increasing access with a CEO-ledstrategy that results in strong performance in public policy and marketinfluence, a large investment in R&D, and good practice in the management of clinical trials, according to the index analysis.  It also has a particular commitment to advancing capabilities in developing countries and to relevant product donation and philanthropy. The company is less consistent in its approach to equitable pricing, where it is an average performer and although only ranked middle of the field in patents and licensing, it has made improvements in this area. 

A notable riser in the index is Merck KGaA, up nine places and into the top 10. Despite being only a mid-sized company, it has improved performance in all areas. Its score improved considerably due to its detailed disclosure around its tiered pricing schemes. Significant progress can be seen in its approach to building developing world capacities in anticounterfeiting and drug-safety monitoring and also in product donation, philanthropy, and R&D. 

Bayer has risen five places since 2010, ranking ninth this index, largely due to an improved management approach, the establishment of targets foraccess initiatives, and an intra-country four-tiered differential pricingscheme. Its score also benefited from increased transparency about itsapproach and initiatives and about its stance on intellectual property issues. 

 “This year’s Index shows that companies are becoming more organized internally in their approach to access to medicine and that those who do this best tend to perform well across the other aspects we measure. The leaders are really raising the bar,” said Wim Leereveld, founder and CEO of the Access to Medicine Index, in a press release. “It’s also clear that companies that do not continue to step up their efforts tend to be overtaken by their peers.” 

 The 2012 index finds that more than 60% of companies now have directboard ownership of access to medicine and that more companies are settingmeaningful targets. Among the highest-ranked companies, there’s an ever-increasing organizational focus. Dedicated access functions are being established and incentives to deliver access objectives are becoming more common and are increasingly supported by performance-management systems. 

For instance, Index leader GlaxoSmithKline has, since the last index report in 2010, established a Developing Countries and Market Access unit as a department dedicated to access, bringing all its businesses in least -developed countries under one umbrella, supported by a new lower price/highervolume business model. Notably, the bonus system for managers in this new unit is structured to reward volume growth rather than profit growth. Three other companies in the top five (Johnson & Johnson, Sanofi and Gilead) as well as Eisai have also created similar dedicated departments. 

 Many companies have increased investment in relevant R&Dand some now devote as much as 20% of their pipeline to developing new products and adapting existing ones to address the needs of the poor, according to the Access to Medicine press release. As well as investing more, companies are working together more often and sharing different types of information thatcan help advance various stages of R&D. 

The primary focus continues to be communicable diseases with the highesthealth burden:  low respiratory infections, diarrheal diseases, HIV/AIDS, malaria and tuberculosis. Although the neglected tropical diseases still receive insufficient investment, they are less neglected than in 2010 andhave received a significant funding boost from the private sector. Among thisgroup, African trypanasomiasis, leishmaniasis and Chagas disease receivethe most investment but there continues to be little, if any, investment forleprosy, soil-transmitted helminths, yaws, Buruli ulcer, dracunculiasis orfascioliasis, according to the analysis. 

The use of inter-country and intra-country tiered pricing, where companies set different prices for the same product depending on the target country or population group within a country, is increasing, with more than three quarters of companies now engaged in it. The number of companies applying the approach within countries has increased from five in 2010 to 12 in 2012. The affordability impact of these schemes is uncertain partly because not all companies disclose the extent of their price reductions, but also because across companies that do disclose, there is little commonality in the way that pricing tiers are constructed and in the reference points used to calculate price reductions. It is therefore not possible to compare schemes in order to assess which companies are delivering affordability. 

 An additional two factors interfere with the industry’s attempt to use tieredpricing to lower prices, according to the analysis. Firstly, companies often do not monitor the extent of mark-ups that third-party sales agents add to the price of their drugs, which means that even if the company sets low prices, the patient mightstill be paying high marked-up prices. Secondly, while so few companies usedifferentiated packaging to prevent drugs meant for the poor being divertedand ending up in the hands of richer patients, there is a risk of medicines notbeing available for the intended communities and that revenues lost throughsuch market leakage could jeopardize the very sustainability of theseschemes. 

However, there are still several areas where all companies could improve their approaches significantly. These include being more transparent about their lobbying practices, expanding their tiered -pricing schemes, adapting packaging to local needs, making their drug donations more needs-based, and allowing their clinical-trial data to be used to accelerate the approval of generic medicines in developing countries.Only four companies provide evidence that they use disciplinary measuresto enforce codes of conduct in relation to CROs they employ to conduct clinical trials on their behalf in developing countries. 

The Access to Medicines Index shows that pharmaceutical companies are increasing drug development for the developing world and using more tiered pricing mechanisms to lower pricing.