Meril Lifesciences has received marketing approval in India for MeRes100, the first bioresorbable vascular scaffold (BRS), launched by an Indian company. MeRes100 is also approved in Columbia, Ecuador, Indonesia and Philippines and is awaiting approval in Europe. The development is noteworthy as it puts Indian medtech industry in the forefront of innovation. BRS represents the next generation of cardiac devices with only one FDA approved product and less than five CE marked products around the world. Unlike traditional bare metal and drug eluting stents, BRS are made of biodegradable material and dissolve in the body. While they support the required acute intervention and restoration of the vessel, they avoid complexities such as risk of late stage thrombosis. As a flagbearer, Meril represents the gradually evolving face of the Indian medtech industry. While the industry has been dominated by importers of medical devices, several Indian companies are now nurturing portfolio-led competitive advantage, are seeking global approvals for their products and are emerging as credible technology developers and absorbers.

Despite hawk-like price watch and scrutiny exerted by lawmakers and public, repurposed drugs continue to attract pharmaceutical companies. Sernenity pharma’s FDA win for Noctiva is a case in point. An off-patent drug that is in use for many indications such as central diabetes insipidus and hemophilia A, Serenity’s repurposed desmopressin acetate nasal spray is the first approved drug in the US for nocturia, a condition causing urine overproduction at night. With skyrocketing drug development costs edging upwards of $ 2.5 billion, repurposing is increasingly viewed by pharma companies as a cost-effective approach to find solutions for newer indications, by building on knowledge of long-established old drugs, existing compounds, and even failed candidates. Pricing becomes a crucial aspect in market strategy for repurposed drugs, more so in this case, as Ferring’s desmopressin nasal spray, although unapproved in the US, is approved in 65 other countries and presents a direct price comparable.With Allergan backing out of its 7 year development and commercialization partnership for Noctiva, the onus is on Serenity to strike the right balance between market acceptability and profitability, prize the product right and steer success.

Given the capital intensive clinical and regulatory phases of drug development in the pharma industry, royalties have traditionally been a crucial tool for value maximization for drug developers and risk optimization for licensees. With NASDAQ listing being an active option for funding clinical development, several ventures have chosen to go on their own or pursue late stage licensing/acquisition transactions. However, this trend has been severely impacted by recent sluggish capital markets coupled with extensive price scrutiny of drugs and a dampened market environment. Cracks in the ecosystem with paucity of sustainable funding mechanisms are starting to be more evident with earlier stage transactions, poorer value realization, deferred clinical milestones and at times,failed ventures as well. The recent asset purchase agreement between Concert Pharma and Vertex Pharma for cystic fibrosis drug candidate CTP-656 is reflective of this trend. Concert has divested the asset to Vertex Pharma for a large upfront lump sum of $160 million for worldwide development and commercialization rights. With additional milestone payments of up to $ 90 million indicated if the drug is approved as part of a combination regimen, there is no mention of royalties. A no-royalty deal such as this is clearly reflective of a trend where financing priorities and risk aversion tendencies of drug developers increasingly drive more cash intense deals with minimal/no participation in value maximization.

China has taken a proactive leap to expand healthcare access and announced a revised National Reimbursement Drug List (NRDL), the list of medicines covered by state medical insurance schemes in China. 339 more drugs are added to the list, including popular blockbuster drugs for cancer, hepatitis etc., bringing up the total to 2,535. This is a big step and a win-win for all stakeholders, as this model not only helps expand affordable public access to latest medicines available in the market in the most populous country of the world, but also expands commercial markets for multinationals and Chinese companies alike in the second largest drug market of the world. This particularly draws attention given the high pitched global debate around drug pricing and access mechanisms. There have been two key milestones in the last two weeks – President Trump recalled his repeal of The Affordable Care Act and India’s Cabinet approved the National Health Policy 2017 (NHP). Retaining Obamacare provides a net of safety to several Americans, whom it increased insurance access for. India’s NHP also emphasizes increasing healthcare spending to 2.5% of GDP, free drugs in public hospitals and creating alternate pharmacy channels for subsidized drugs. However, the NHP also continues to wave the sword of price control, the most over utilized mechanism of healthcare access in India that continues to stifle markets and hinder commercial attractiveness of the domestic market. Global developments call for rethinking healthcare access in a contextual manner and China seems to set a good example for other emerging economies to consider.