1. STATUS PRESENTATION ON BRCC PROJECT- GUJARAT 26 th June, 2012 CUTS INTERNATIONAL

2. Presentation Points  About Raman Development Consultants (RDC)  Overview of Pharma sector in Gujarat  Team RDC- BRCC Project, Gujarat  Regulations & Process in Pharma sector  Sample framework of the research study  Approach and methodology  Interim findings of the study  Social, Environmental & Economical impact RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 2

3. About RDC 22 year old organization registered under Company’s Act, 1956 Mission: Enhancing social and entrepreneurial capital of India and other developing countries. RDC has completed more than 800 projects and worked with all major donor agencies and government agencies in India across more than 25 states and also in 7 South Asian countries. Head Office at Ahmedabad, National Office at Delhi and representative offices in 9 states of India Focused sectors: Public health, Infrastructure development and public-private partnership, Urban development, Governance & institutional development, Sustainable livelihood, Disaster mitigation. Services: Policy and strategy development, Behavioral/biological/ social Research, Monitoring & Evaluation, programme design and management, training and capacity building, system design,, MIS, communication/constituency building and development RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 3

4. Overview of Pharma sector in Gujarat  India’s 2 nd domestic Pharmaceutical unit estd. in 1907  42% of total Indian Pharmaceutical turnover with valued 4.3 billion US$ (21500 crore INR)  35 to 46 % share in total Pharma production in India  22 % of total export of the country  60000 Employment in the sector  6 Pharma sanctioned SEZs in the state  37 Pharma Academic Institutes having 2375 students intake RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 4

5. Pharma Licenses/Units in Gujarat Sr. No. Types of Pharmaceutical Licensed Units Production Units 1.Allopathic43992439 2.Ayurvedic668661 3.Cosmetics419394 4.Homeopathic16 Total55023533 Source : FDCA - Gujarat RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 5

6. Team RDC- BRCC Project- Gujarat No.RDC TeamDesignation 1.Rajendra JaniAdvisor 2.Dr. Ketan GandhiTeam Leader 3.Dr. Hardik Solanki (MD- P&SM) Project Coordinator 4.Dr. Praksh Shelat (MD- Pharm) Team leader- Prescription analysis 5.Ajay KananiTeam member 6.Nazhat KhanTeam member 7.Mehul BhatiaTeam member 8.Five field researcher (MBA) RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 6

7. Regulations- Policy, Act, Norm, Authority Pharmaceutical firmsPrivate Hospitals Regulations & Authority License: FDCA Launch of new drug in India: DCGoI Clinical trial of new drug: CDSCO Drug price control: NPPA/ DPCO Drug patent: Patent act Regulations & Authority Bombay nursing home act,1949 Public trust act, 1950 Company act,1956 Hospital establishment act,1997 Marketing & distribution UCPMP: All India Pharmaceutical Manufacturing Association Marketing & distribution Medical code of Ethics, 2002: MCI Environment GMP (Schedule M under Drug & Cosmetic act, 1940): FDCA Pollution control & monitoring: GPCB Environment Bio-Medical waste rule, 1998: GPCB RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 7

8. Process of Pharmaceutical sector RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 8 Continue in next slide

9. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 9

10. Approach and Methodology RespondentSample size Data collection toolApproach Pharmaceutical firm- Manager/ Director/ CEO/ Accountant 100Semi-structured questionnaire & collect best practices documents Scheduled interview with prior consent on tele-talk/ eMail/ personal visit Private Hospital- RMO/ Manager/ CEO/ Accountant 100Semi-structured questionnaire & collect best practices documents Scheduled interview with prior consent on tele-talk/ eMail/ personal visit Medical Representative 40Semi-structured questionnaire Snow balling Prescription Analysis 250Prescription of OPD Patients Xerox/ Digital photo with consent RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 10

11. Sample size for Pharma sector Sr. No. Place of study Total Pharma. units % of Total Sample frame 1. Ahmedabad51146.445 2. Vadodara33230.120 3. Bharuch12111.015 4. Valsad13612.315 Total1100100 Source : Department of Pharmaceutical, GoI- 2010 RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 11

12. Sample size for Private hospital Sr. No. Place of study Total Private Hospital % of Total Sample frame 1. Ahmedabad 51068.770 2. Vadodara 21028.320 3. Bharuch 131.78 4. Valsad 91.22 Total 742100 RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 12

13. Status of field work Sr. No. Particulars Sample Size Sample achieved % 1. Pharmaceutical Firms 1002020 % 2.Private Hospitals1002020 % 3. Medical Representatives 403075 % 4. Prescription Collection 2509035 % Status as on 18 th June, 2012 RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 13

14. Common observations Low proactivity for self regulation Weak system of penalties for contempt of regulation No mechanism of incentives for next/good practices Cuts & commission is well accepted trade practice RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 14

15. Interim findings  Good Manufacturing Process (GMP): Majority of firms are aware about the GMP but general consensus is low rate of compliance in the different segments.  Safe environmental initiative: It is common belief that only bulk drug production units are responsible for environmental pollution. Setups for effluent treatment is not sufficient in the plant or not in working condition.  Regulations: low proactivity for self-regulation, weak system of penalties leading to unethical practice.  Firms are in favor of strict implementation of regulations with generation of transparency in the system. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 15

16. Interim findings (cont.)  Cuts and commission: well accepted trade and practices  Accepted by Pharma firm as a marketing policy &  Doctors want solicitation  MRs are the instrument for cut practices  Discussion about cut practices: no formal sector is willing to discuss about cuts and commission but talking is place in informal settings. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 16

17. Interim findings (cont.)  Bio-medical waste rule, 1998: Practice under BMW management is not followed in true spirit.  Inadequate training of hospital staff & improper handling  Irregular monitoring from GPCB  No interaction between GPCB and private hospital  No regulation or formal body that monitor the practice of hygiene/ universal precautions maintenance by hospitals  Expressed need for facilitation meetings & training: early dialogue from GPCB is welcomed with aim to improve access to health and safe practices. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 17

18. Interim findings (cont.)  System of BMW service providers is not mature: irregular service, high charge  Lack of healthy competition  Monopolistic nature  There is a need for separate study in service providers  Medical code of Ethics,2002: no mechanism in place to ascertain whether in-house or empanelled doctors comply this regulation.  There is continuous inherent distress between doctors and administration & other support staff  Social capital is fragmented  Rational use of drugs: there is sectorial gap between behavior of doctors and rational use of drugs RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 18

19. Social impact of violation of business responsibility 1. Social responsibilities are forgotten in Pharma firms as the budget which would be for CSR is being spent for Marketing 2. Business values are changing, cuts & commission is well accepted trade practice 3. Self regulation is becoming second responsibility for the sector 4. Doctor-patient relationship has lost its spirit, patient has become a costumer for doctor. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 19

20. Environmental impact of violation of business responsibility 1. Ignoring environmental importance in the name of ‘Pharma is a non polluting industry’ 2. Non availability or inadequate waste treatment and disposal facility, discharge of polluted and hazardous Pharma waste in river or land by small and scattered units. RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 20

21. Economic impact of violation of business responsibility 1. Violation of Business Responsibility is responsible for inflation 2. Patients are paying high cost for medicines - Cost effective health is now dream for poor 3. The prevailing marketing practices in the sector has lost the competition benefits to consumers 4. Schemes for C & FA, Gifts for stockiest, Discount for distributors, commissions for doctors and benefits to chemists, but not any/minimal concession for consumers RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 21

22. Open space RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 22

23. Thank you RDC/ CUTS/ BRCC-Gujarat : 26-6-2012 23