the private sector market for diarrhea treatment …...internal priorities between higher and lower...

C l i n t o n H e a l t h A c c e s s I n i t i a t i v e

N e w D e l h i , I n d i a

April2012

ThePrivateSectorMarketforDiarrheaTreatmentinIndia

TableofContents

Abbreviations ..........................................................................................................................................................................3

Acknowledgments..................................................................................................................................................................4

ExecutiveSummary ..............................................................................................................................................................5

Context .......................................................................................................................................................................................8

Methodology ............................................................................................................................................................................9

DiarrheaTreatmentPrivateSectorSupplyChain.................................................................................................... 11

RegulatoryEnvironment .................................................................................................................................................. 16

Manufacturing ...................................................................................................................................................................... 23

Distribution........................................................................................................................................................................... 32

ProviderBehavior............................................................................................................................................................... 35

CaregiverBehavior ............................................................................................................................................................. 42

RetailerBehavior ................................................................................................................................................................ 45

SupplysidebarrierstoORS/zincuptake .................................................................................................................... 48

DemandsidebarrierstoORS/zincuptake ................................................................................................................. 48

Conclusion ............................................................................................................................................................................. 49

Abbreviations

AIOCD AllIndiaOraganizationofChemistsandDruggistsAIIMS AllIndianInstituteofMedicalSciencesAYUSH Ayurveda,YogaandNaturopathy,Unani,SiddhaandHomeopathyBMGF TheBillandMelindaGatesFoundationC&F CarryingandForwardAgentCDSA ClinicalDevelopmentServiceAgencyCHAI ClintonHealthAccessInitiativeCME ContinuingMedicalEducationCST CentralSalesTaxDBT DepartmentofBiotechnologyDCA DrugsandCosmeticsActDCGI DrugControllerGeneralofIndiaDCR DrugsandCosmeticsRulesDLHS DistrictLevelHouseholdSurveyDPCO DrugPriceControlOrderFDA FoodandDrugAdministrationFMRAI FederationofMedicalandSalesRepresentativesAssociationofIndiaGOI GovernmentofIndiaIAP IndianAcademyofPediatricsIMA IndianMedicalAssociationIMC IndianMedicalCouncilIMNCI IntegratedManagementofNeonatalandChildhoodIllnessesINR IndianRupee IP IndianPharmacopeiaJSI JohnSnowInternationalKOL KeyOpinionLeaderMR MedicalRepresentativeNGO Non‐governmentalorganizationNFI NationalFormularyofIndiaNPPA NationalPharmaceuticalPricingAuthorityOPPI OrganizationofPharmaceuticalProducersofIndiaORS OralRehydrationSaltsOTC OvertheCounterPSI PopulationSciencesInternationalRMP RuralMedicalPractitionersSTG StandardTreatmentGuidelinesUNICEF UnitedNationsChildren'sFundUNSE UnitedNationsSecretaryGeneralSpecialEnvoyformalariaWHO WorldHealthOrganization

Acknowledgments

Wewouldliketothankthefollowingindividualsforsharingtheirknowledgeandexperiencesonscalingup

diarrheatreatmentintheprivatesectorinIndia.Thisworkwouldnothavebeenpossiblewithouttheir

generouscontributionsandtirelesswork.

Cipla

AshayTrivedi

ZuventusHealthcareLimited

ArunKumar

Dr.ReddysLaboratories

B.ViswanathNavneetGupta

RPGLifeSciences

V.KSinghP.KPathak

Alkem

AbhilashSoral

MankindPharmaLimited

AkhileshAhemad

OrbitLifescience

AmitShethAshishSheth

FHI360

ChandraSharmaAbhayPratapSinghPushprajKaushikManishaTripathi

PATH

Dr.KaminiWalia

FDCLimited

SujoyBanerjeeHemaliPeluSameerSurte

MicronutrientInitiative

MaheshSrinivasMathewJoseph

WorldHealthPartners

Dr.AnnaStratisPrachiShukla

HindustanLatexFamily

PlanningPromotionTrust

ShubraPhillips

UNICEF

HenriVanDenHombergh

WorldHealthOrganization

Dr.BGitanjali

PleaseforwardallcorrespondenceaboutthisreporttoParthBahuguna

([email protected])andHimaBatavia([email protected])

ExecutiveSummary

Context

Diarrheal diseases accountfor approximately 235,000of the 2 million1 deaths ofchildren under the age offive in India each year. It isestimated that treatment ofdiarrhea with OralRehydrationSalts(ORS)andzinc,asrecommendedbytheWHO, can avert nearly 90%of the deaths. However, theuptake of this treatmentremains unacceptably low.Nationwide, only 39%2 ofcaregivers use ORS to treatdiarrhea,andtheuseofzinc

in high‐burden states isalmostnegligibleatlessthan2%3. Nearly 26% of

caregiversdonot seek treatment fordiarrhea, and thosewhodoseek treatmentare typically treatedwithantibioticsoranti‐diarrheals4.

Improving use of zinc and ORS for treatment of childhood diarrhea presents a significant opportunity toacceleratethereductionofchildmortalityinIndiainsupportoftheachievementofMillenniumDevelopmentGoal4andtoexpandthevalueoftheORSandzincmarket.Accordingly,theGovernmentofIndiaisdevisinganationalstrategytodramaticallyscale‐upaccesstoessentialmedicinesforchildren,whichincludesORSandzincfordiarrhea.Aspartofthisstrategy, interventionstargetingtheprivatehealthsectorwillbeessential,since nearly 60%5 of caregivers in India seek treatment for diarrhea from a private healthcare provider.Designinghigh‐impact interventionswill requireanunderstandingof thecurrentdynamicsof thediarrheatreatmentmarket in India and the key barriers hindering the uptake of ORS and zinc at each level of thesupplychain.Thisassessmentwasperformedtocontributetothisendbyexaminingthediarrheatreatmentmarket in away that offers strategic direction for the development of India’s essentialmedicines nationalstrategy.

Methodology

Primary and secondary data collectionwas conducted between September 2011 and January 2012,whichincludedsemi‐structuredinterviewswithkeyinformantsoperatingatdifferentlevelsofthesupplychain,afield visit to an international NGO’s project site in Lucknow, Uttar Pradesh and a desk review of existingqualitativeandquantitativeresearch,andpopulation‐baseddata.

1UNICEF."Morethan1MillionChildDeathsinIndiaCanEasilyBePreventedEveryYear."Web.AccessedonNovember22,2011.

Availableat:http://www.unicef.org/india/health_491.htm2NationalFamilyHealthSurvey,India2007‐20083UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”20094Ibid5Ibid

Figure 1: Diarrhea mortality and ORS coverage in India. Source: National Family Health Survey India, 2007-2008.

Background

In India, thequalityofhealthdelivery in thepublicsector iscompromisedby fundingandhumanresourceshortages,leadingtofrequentdrugstock‐outs,providerabsenteeismandanoverallsubstandardlevelofcare.Bydefault,nearly80%ofoutpatientvisitsinurbanandruralareastakeplaceintheprivatesector6.AcrossIndia,theratioofpublicproviderstoprivateprovidersis1to107.

Within theprivatehealth system, aheterogeneous groupof providers is found.This ranges fromqualifiedproviders that practice allopathic medicine or alternative systems of medicine (e.g. ayurveda, yoga) tounqualifiedproviderswithno formalmedicaleducation. Theseunqualifiedproviders,calledRuralMedicalPractitioners(RMPs),accountfor65%ofallprovidersinIndiaandarethemostcommonfirstpointofcarefordiarrheatreatment8.

DemandsideBarriers

Majorityof caregivers that seek treatment fordiarrheaarenotprescribedORSandzinc.47%of the9,298caregiverssurveyedin10statesinIndiareportedreceivinganinjectabledrug,antidiarrhealorantibioticforthetreatmentofdiarrhea,incomparisontothe47%prescribedORSand1.3%prescribedzinc9.

This incorrect prescription behavior is largely driven by low awareness of zinc as the recommendedtreatmentfordiarrheaandpoorperceptionsofORSasaneffectivediarrheatreatment,leadingtoanincreaseintheuseofalternativedrugssuchasantibioticsandanti‐diarrheals.Further,adiscrepancyexistsbetweenwhatprovidersandcaregiversknowaboutdiarrheatreatment,andwhattheydo,referredtoasthe“know‐do”gap.

Studies led inonedistrict in10 states and specifically inBihar,UttarPradeshandGujarathave confirmedthese findings.For instance,between9‐19%ofprovidersreportprescribingzincasthe first‐linetreatmentfordiarrhea,however,although5‐21%ofcaregivershaveheardofzinc,only1‐4%ofcaregiversreportbeingrecommended to treat their child with it. This trend extends to ORS, where 90% of provider’s reportprescribingtheproductfordiarrheatreatmentandbetween55‐88%ofcaregiver’sreportbeingawareofit,butonlybetween15–38%ofcaregiversreportactuallyusingORStotreattheirchild’smostrecentdiarrheaepisode10,11,12.

ThesebehaviorsaredrivenbytheperceptionthatORSisequivalenttohomeremedies(e.g.sugarandsalt)andbothORSandzincdonotaddressthe“immediatesymptoms”ofdiarrhea–atreatmentoutcomethatishighly valued amongst caregivers. As a result, private providers, who are heavily influenced by caregiverpreferencestomaintainaloyalconsumerbase,prescribealternativemedications.

TheprofitabilityandaffordabilityofORSandzincversusalternativetreatmentsalsoplaysaroleinproviderprescribingbehaviorandcaregiverpreferences.AnalysisofretailandproviderconsultationdatafoundthattreatmentofdiarrheawithORSandzincfromanRMPis55%higherthanwithanantibiotic.

Thesecircumstanceshaveledtoa“markettrap”forORSandzincinIndia,wherebycaregiversandprovidersdo not demand the products due to limited awareness and appreciation of comparative benefits, andsuppliersdonotpromoteanddistributetheproductsduetoinsufficientdemand.Consequently,ORSandzinc

6RamaniKVandMavalankarDileep.“HealthSysteminIndia:OpportunitiesandChallengesforimprovement,”IndianInstituteofManagement,July20057CentreforPolicyResearch."MappingMedicalProvidersinRuralIndia:FourKeyTrends."February2011.8Ibid9UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”200910UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”200911Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,201112Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011

arenotreadilyavailableattheretaillevel,especiallyinruralareas;asurveyinUttarPradeshfoundonly50%ofretailersstockedORSand8%stockedzinc13.

SupplysideBarriers

Currently, 52 pharmaceutical companies manufacture ORS and 23 manufacture zinc in India, valuing themarket for the products at nearly US$41M annually14. However, the market is largely controlled by fivecompanies, of which none have achieved the profits or internal buy‐in to invest the resources needed todramatically shift thediarrhea treatmentmarket fromantibiotics andanti‐diarrheals toORSandzinc.Thescopeofthemarketisalsolimitedbytheambiguousregulatorydrugstatusofzinc,whichisnotclassifiedandnotconsideredanOver‐The‐Counter(OTC)product,likeORS15.Asaresult,directtoconsumermarketinganddistribution to non‐licensed retailers (e.g. grocery stores) is restricted. In cases where companiesmanufactureabasketofdiarrhea treatments, includingORS, zinc, antidiarrhealsandprobiotics, competinginternalprioritiesbetweenhigherandlowermarginproductsmayimpactmarketingandsalesstrategies16.

Recommendations

ThemarketforORSandzinchasthepotentialtoreachUS$128millionby2015,anincreaseofover200%.Capitalizingon thisopportunityby increasing thedemand foranduptakeofORSandzinccansignificantlyaccelerateprogressonreducingchildmortality inIndia. However,realizingthisopportunitywillrequireajointeffortbytheGovernmentofIndia,donors,pharmaceuticalcompaniesandnon‐profitorganizations,thatbalancesawillingnesstolearnfrompastexperiencesandtestnewideas.

Atthetopofthesupplychain,illustratingthemarketpotentialofORSandzincinthenextthreeyearswillbecritical to engaging pharmaceutical manufacturers in committing adequate resources to repositioning theproducts as clinically effective and affordable through innovative marketing tactics and improvingaccessibility through public‐private distribution strategies. The introduction of a co‐packaged product inparallelwithamulti‐channelsocialmarketingcampaignmaybeanattractiveoptiontoframeORSandzincasthe new “gold‐standard” treatment for diarrhea. The Government of India, in partnership with non‐profitorganizations,canplayasignificantroleincommunicatingthisopportunitytotheprivatesector,andguidingtheminawaythatensuresadoublebottomlineisachieved.

Atthebottomofthesupplychain,trainingRMPsontherecommendeddiarrheatreatmentsandinfluencingkeyqualifiedproviderson theefficacyofzincwillbecritical to increasinguptake.Thiswill requireadeepunderstandingofthefactorsthatmotivatethesecadresofhealthprofessionalstochangetheirbehaviorandpartnerships with influential professional societies. Incentives that impact the livelihoods of providers,reinforced messaging through mobile technology and institutional partnerships structured to build orcompromise professional reputations are some ideas that should be explored further. Medicalrepresentatives, in partnershipwith non‐profit organizations can play a significant role in communicatingaccuratemessagesandcollateralinawaythatensuresadoptionandintegrity.

13RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."200814ORG/IMSData,September2011MAT15GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother2011;2:225‐916Interviewswithpharmaceuticalmanufacturers,October2011

Context

InJuly2011,undertheleadershipofUNICEFandRayChambers,theUNSpecialEnvoyforMalaria,agroupofpartners began developing a new global initiative to dramatically accelerate the scale‐up of effectivetreatment for the three largest killers of children: diarrhea,malaria, and pneumonia. Improving access tomalariatreatmentanddiagnosishasreceivedsignificant, ifstill insufficient,attentionandfundinginrecentyears. In contrast, scale‐up of diarrhea and pneumonia treatment has been largely neglected for the pastdecade,resulting in lessanalysisonsolutions toachieve large‐scaleaccess to theseproducts.The initiativeseeks to mobilize additional attention, resources, and concrete action to support 10 countries with thehighest burdens of these diseases to design and implement ambitious programs to scale‐up appropriatetreatmentwiththegoalofachievinguniversalaccessbytheendof2015.As one of these high‐burden countries, the Government of India (GOI), with assistance from the ClintonHealthAccess Initiativeandotherpartners, isdevelopinga treatment scale‐upplan toaddress these threechildhoodillnesses.Currently,nearly60%ofchildreninIndiaseekandobtaincarefordiarrhea,malariaandpneumonia from the private sector17. This indicates a need for a different approach that includesmarket‐orientedinterventionstoensuregreatercoverageofeffectivetreatments.ThisisparticularlythecaseforORSandzinc,theWHO‐recommendedtreatmentsfordiarrhea,sincebothproductsaresafeforover‐the‐counteruse, indicating suitability for distribution through the private sector. Thus, it is essential to gain a betterunderstandingoftheprivatesectorsupplychaininordertoensurethatthesetreatmentsreachthemaximumnumberofchildreninneed.This report presents the findings of a rapid assessment of the private sector supply chain for diarrheatreatmentinIndia,withtheintentofusingthesefindingstoinformtheGOIbroaderscale‐upstrategy.Theaimofthisanalysiswasto:1.Understandthedynamicsthatgoverntheprivatesectormarketfordiarrheatreatment,includingORS,zinc,andkeycompetingproducts;2.GenerateadatasettoidentifythesupplyanddemandbarrierstouptakeofORSandzinc;3.UtilizethedatasettodirectlyinformORSandzincscale‐upeffortsinIndia

17WHOIndia."NotEnoughHere‐TooManyThere‐HealthWorkforceinIndia."Web.Accessedon:November10,2011.Availableat:http://www.whoindia.org/LinkFiles/Human_Resources_Health_Workforce_in_India_‐_Apr07.pdf

Methodology

Thisassessmentcombinesprimaryandsecondarydatacollectiontoanswerfourkeyresearchquestions:

• WhatarethecurrentmarketdynamicsofdiarrheatreatmentinIndia?• WhoarethekeystakeholdersintheprivatesectormarketfordiarrheatreatmentinIndia–whatis

theirroleandlevelofinfluence?• Whatfactorsaredrivingthedecisionsofcaregivers,providersandretailerswithregardstodiarrhea

treatment?• WhatarethegreatestsupplyanddemandbarriersinhibitingtheuptakeofORSandzincinIndia?

This assessment was conducted from September 2011 to January 2012. It included semi‐structuredinterviewswith44keyinformantsacrossthesupplychaininNewDelhi,Mumbai,Lucknow,andBhopal.Thisincludes:pharmaceuticalmanufacturers,distributors/wholesalers,providers,retailers,governmentagencies,

and non‐profit organizations (Table 1). Keyplayers in thediarrhea treatmentmarketwereidentified through competitive researchconducted by the Clinton Health AccessInitiative inMay2009. Internal contacts in thepharmaceutical industry and non‐profit sectorin Indiawere leveraged followedbyutilizationof a snowball methodology to meet additionalkey informants. AmeetingheldbytheClinicalDevelopment Service Agency in New Delhi,India in August 2011 called “Meeting ofSuppliers of zinc Tablets for the Treatment ofChildhood Diarrhea” also served as a platformto initiatecontactwithkeystakeholders in thesector. Data collected from these interviewswere used to inform the manufacturer anddistributionsectionsofthisreport.

Desk research was also conducted for thisassessment by reviewing studies on diarrheatreatment behavior in India compiled by non‐

profitorganizationsUNICEF,AED,andMicronutrientInitiative.Reportsthatincludedrepresentativesamplesizes in high‐burden states were chosen for further analysis and synthesis and informed the caregiver,provider and retailer sections of this report. Google scholar searches were conducted to locate reportsoutliningthepharmaceuticalsupplychain,marketoutlookanddrugregulationsinIndia,whichwereusedforthesupplychainandregulatorysectionsofthisreport.

Lastly,marketdataongastrointestinaltreatmentscollectedbyIMS/ORGfortheperiodofSeptember2010–September2011,wasanalyzed todetermineannualvolumes,market sizeandmarket share for commonlyuseddiarrheatreatmentsacrosspediatricandadultpopulations.ORSandzincretailpricingdatawassharedbyanon‐profitorganization, andcostdatawas compiled throughvarious sources includingkey informantinterviews,academicpapersandgreyliterature.

Limitations

• Quantitativedataisrepresentedinrangestorepresentdifferencesacrossavailablestate‐leveldata.Statelevelfindingspresentedshouldnotbeinterpretedasnationaltrends

• Datacollectedfromkeyinformantinterviewssufferfromthecommonweaknessesofqualitativeresearch.Inthiscase,pharmaceuticalmanufacturersmayhaveonlydisclosedpubliclyavailableinformationforlegalandcompetitivereasons

Type of key informant Number interviewed

Pharmaceutical manufacturer 9

Non-profit organization 9

Stockist 3

Provider (qualified and unqualified) 10

Retailers 10

Government Agency 1

Advertising Agency 1

Consumer Packaged Goods 1

TOTAL 44

Table 1: Key informant interview list

• PrimarydatacollectionofarepresentativesamplesizewasnotconductedbyCHAIforthisassessment,andheavilyleveragesonexistingresearchandliterature.Thequalityofresearchwasdeterminedbythestrengthofthepartnerand/orthesamplesizeofastudy

DiarrheaTreatmentPrivateSectorSupplyChain

OverviewofthePharmaceuticalSector

Indiahasonethefastestgrowingpharmaceuticalindustriesintheworld,valuedat$12.6billionin200918,ofwhichappropriatediarrheatreatments(ORS&zinc)representlessthan0.03%(~$41million)19.Incontrast,antibiotics anti‐diarrheals and other gastrointestinal products also commonly used for diarrhea treatmentrepresentnearly2.06%(~$259million)ofthemarket20.Overthelast5years,theindustryhasbeengrowingbetween13‐15%annually,drivenprimarilybyanincreaseindisposableincomeandsupportedbyariseinthe prevalence and treatment of chronic diseases, expansion of medical infrastructure, wider coverage ofhealthinsuranceandthelaunchofpatentedproducts21. By2020,thepharmaceuticalmarketisexpectedtogrowto$55.0billion,assuminggreatergovernmentspendingonpublichealthandtheprovisionofinsurancecoverage for those below the poverty line22. Increased acceptability of allopathic medicine amongstconsumers will lead to increased adoption of biologics and preventative medication. Further, a greaterpropensitytoself‐medicatehasthepotentialtoinfluencegrowthinthesaleofover‐the‐counter(OTC)drugsby 14% annually to become a $14‐18 billionmarket by 202023. This is especially the case for therapeuticareassuchasrespiratoryandgastrointestinal, includingdiarrheatreatments,whichhavetraditionallybeentreatedbyproviders.IndianORSandzincmanufacturerscantakeadvantageofthisshiftingmarkettrendandsignificantly increase their market share by intelligently positioning their products thereby reducingcaregiver preference towards antibiotics and anti‐diarrheals. However, experts believe that this growth isheavilypredicatedonacompany’sabilitytocustomizeproductsfromconsumerresearch,brandproductsina way that establishes an emotional connection with consumers, and accept lower margins to increasereach24.

Currently,thereareover20,000licensedpharmaceuticalmanufacturersacrossIndia.Thesecompaniesvaryinsizefromsmall‐scalelocalmanufacturerstolargeproductionunitsandincludefivecompaniesoperatingunderpublicownership25.Between250‐300companiesmanufactureapproximately70%oftheproductsonthemarket,with the top10 firmsrepresenting30%of thewhole26. InNewDelhi, Indiaalone thereareanestimated95,000pharmaceuticalproductsonthemarket27.

Since India had a system of process patents until 2005, themajority of these companies produce genericdrugs28.Brandedgenerics(off‐patentdrugsmarketedunderabrandname)dominate,accountingfor70‐80%of the retailmarket.However, branded generics are increasingly threatenedbynon‐branded generics thattypicallyoffermorelucrativemargins29.BothORSandzincaresoldasbrandedgenericproductsinIndia;theprofitmarginsontheseproductsaretypicallylowasproductdifferentiationisnotakeysalesdriverinthiscategoryincomparisontopricecompetitiveness.Giventhefiercecompetitioninthebrandedgenericmarketspace, the potential for one manufacturer to grab a substantial market share is small; as a result,manufacturers are typically less willing to invest in promotion and distribution expansion activities for aspecific branded generic product. Exports also account for a large portion of India’s pharmaceutical

18VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,2010 19ORG/IMSData,September2011MAT20Ibid21VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,201022Ibid23Ibid24PriceWaterhouseCooper.“IndiaPharmaInc:CapitalisingonIndia’sGrowthPotential.”201125 Anita Kotwani, and Libby Levison. "Price Components and Access to Medicines in Delhi, India." Department for InternationalDevelopment(DFID),April2007.26PriceWaterhouseCooper.“IndiaPharmaInc:CapitalisingonIndia’sGrowthPotential.”201127AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.28VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,201029Ibid

manufacturingbusiness.Nearly 70%of branded genericsmanufactured are exported to over50 countriesglobally, with United States, Russia, Germany, Australia and United Kingdom accounting for the highestnumberofimports30,31.

OverviewofthePharmaceuticalSupplyChain

Thepharmaceuticalsupplychain inIndia isexceptionally fragmented,with independentprivatecompaniesoperatingateverylevelofthesystem(Figure2).Atthetopofthesupplychainare20,00032pharmaceuticalmanufacturerslocatedacrossIndia.

Theroutebywhichahealthproductmovesalongthesupplychainisdeterminedbyhowthehealthproductismarketed.Ifamanufacturerchoosestomarketthehealthproductitself,itwillbetransferredtoaCarryingandForward(C&F)agent.C&Fagentsareprivately‐ownedbusinessesthatholdalicensetosellthehealthproductinthenameofthemanufacturertowholesalers.Typically,eachmanufacturerhas1‐3C&FagentsineachofIndia’s28states,andeachC&Fagentworkswithamaximumof1‐3manufacturers.CompensationisbasedontheC&Fagent’sannualtotalturnover,rangingfrom4%forhighturnoverproductsto10%forlowturnoverproducts33.

While C&F agents lead the distribution of the products, manufacturers handle marketing through thedeploymentofMedicalRepresentatives(MRs)acrossthecountrytodetailprovidersandretailersontheclinicalbenefitsofthehealthproductanddisseminateacademicliterature,marketingmaterials,freesamplesand brand reminders. There are approximately 100,000 MRs registered in India with the Federation ofMedicalandSalesRepresentativesAssociationofIndia(FMRAI)34.Thesizeofacompany’ssalesforcelargelydeterminestheextentofacompany’sgeographicreach.Forlargecompany’s,thisfieldforcetypicallyrangesfrombetween500–2,000MRs,whoareinmostcaseslimitedtoClassIandClassIItowns(>100,000)35.Ingeneral,anMRwillbegingeneratingdemandforaproductatthedirectionofitsemployer,atherapygroupwithin a pharmaceuticalmanufacturing company.Most ORS and zincmanufacturers instruct theirMRs tostart promoting ORS and zinc products before and during themonsoon season in India, which runs fromMarch to July36.According to interviewswith selectpharmaceuticalmanufacturers, cliniciansaregenerallynotinterestedinlearningaboutORSastheseproductshavebeendetailednumeroustimesoverthelastfewdecades.

Whenamanufacturerchoosesnottomarketahealthproductitself,thehealthproductisshippeddirectlytoaSuperstockist.Super‐stockistsarealsoprivatelyownedbusinesses,butunlikeaC&Fagent,theyhavetheirownlicensetosellhealthproductsandinvesttheirowncapitalinmarketingandpromotionactivities.Moststockistshavesizeablesalesteams,varyingfrom10‐50dependingonthesizeoftheenterpriseandtheareaservicedbyit. Thesalesforceisresponsiblefornotonlyfulfillingroutineordersbutalsoforenlistingnewretailers,promotingnewproductsandexpanding thegeographicalcoverageof theenterprise37. Ingeneral,lower‐pricedbrandedgenericsaredistributedthroughsuper‐stockists,andcompensationrangesfrom2‐5%ofannualproductturnover38.

BothC&Fagentsand super‐stockistsdistributehealthproducts toStockists,acrosseverydistrictwithinagivenstate.Onaverage,aC&Fagentorsuper‐stockistwillworkwithanywherefrom2,000–7,000stockists

30Biospectrum.“Indiacontributes20%oftheglobalgenericsmarketsupply.”July19,2010.Availableat:http://www.biospectrumasia.com/content/090710IND13033.asp31PoojaGuptaandPradeepManjrekar.“Innovationstrategiesinthebulkdrugindustrycasestudy:UnilabChemicalsPvt.Ltd.andM/sBlueCircle.32MinistryofIndustryDepartmentofCommerce,GovernmentofIndia.“Strategyforincreasingexportsforpharmaceuticalproducts:ReportofTaskForce.”December200833EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008.34FederationofMedicalandSalesRepresentativesAssociationofIndia(FMRAI).Web.AccessedonDecember12,2011.Availableat:http://www.fmrai.org/35Interviewswithpharmaceuticalmanufacturers,October201136Ibid37Interviewswithstockists,November201138Ibid

acrossthecountry39.InIndia,therearereportedlyover60,000stockistsacrossthecountry,eachmanagingtheinventoryofproductsfrom5to50pharmaceuticalcompanies40.

Stockistswilleitherdistributeproductstosub‐stockists,orselldirectlytoRetailersthroughtheirownsalesforce, oftenofferingproducts on a21 to45day credit policy41. For example, a large stockist inNewDelhireportedsupplyingproductsto500‐600retailersinthecity42.Thereareapproximately550,00043healthcareretailersinIndiathataredividedintotwocategories:organizedandunorganized.

Organizedpharmaciesaccountfor1‐2%ofallhealthcareretailersinIndiaandareusuallystructured as franchises that sell OTC drugs and are situated in urban areas44. Expertspredict that the growth of healthcare retail franchises is on the rise, especially since thestructureallowsforvolumecostbenefitsthatcanpotentiallybepassedontotheconsumer.Pharmaceutical companies, suchasRanbaxyPharmaceuticalsandnationalbrands suchasRelianceHealthCareandSubhiksha,aresettingupretailchainsacrossIndia,withtheintentto squeeze out wholesalers and offer consumers perks such as discounts and loyaltyprograms45.Unorganizedpharmacies,ontheotherhand,stillaccountforthebulkofhealthcareretailersin the country, and extend to providers, grocery stores and paan stalls that sell healthproducts. Though the Food and Drug Administration of India orders that only qualifiedpharmacists canobtain licenses to operate a pharmacy, pharmacists are oftenhiredpart‐timeoronlyfortheuseofasignaturebypharmacybusinessownerstofulfilltheregulatoryrequirements46.

Bylaw,retailpharmaciesmustmeettheminimumarearequirementof10squaremeterstooperate47.ThoughsmallwhencomparedtoWesternstandards,thisamountofspaceisthenorm for most unorganized pharmacies in rural India, resulting in a shortage of storageroom for products, inability to maintain appropriate temperature conditions for specificproductsandlimitedinteractionbetweenpharmacypersonnelandpatient’s.Consequently,most unorganized pharmacies only stock health products for common illnesses, and areusuallylocatedonbusyroads48.

AstudyconductedbytheDepartmentforInternationalHealth(DFID),UKfoundthatanaveragepharmacyinNewDelhi,Indiastocksbetween10,000and15,000drugs,with5‐50versionsofeachmedicinefrom30‐40stockists49. This high number of products, combinedwith small amounts of space,means that pharmaciesstocklimitedquantitiesofeachproduct,oftenrequiringastockisttodeliverproductdaily50.Itisimportanttonotethatthesecharacteristicsareuniquetoametro,incomparisontoatownorvillageinIndia.

SomeNGOsandprivateproviders (mostlyunqualified)also sell anddistributedrugs in the country.WhileNGOstypicallypartnerwithmanufacturersdirectlyandselldrugsatasubsidizedpricetocaregiversortothegovernment,privateproviderstypicallybuydrugsthroughapharmaceuticalMRorthrougharetailer.Privateproviders that are serviced by MRs are privy to the same profit margin as retailers, in comparison toproviderswhobuydrugsfromaretaileratabulkrate.

39EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008.40Ibid41Interviewswithstockists,November201142AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.43EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008.44Ibid45PriceWaterHouseCooper."GlobalPharmaLookstoIndia:ProspectsforGrowth."46RogerJefferyetal.“PharmaceuticalsdistributionsysteminIndia.“CentreforInternationalPublicHealthPolicy,July200747AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.48Ibid49AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.50Ibid

Themodel of drugdistribution in India outlined above is expected to evolve over thenext decade towardmoreconsolidation51.Influentialhospitalchainsandpharmaceuticalcompaniesareincreasinglyinvestingininfrastructure, such asmanufacturing units, hospitals and retail pharmacy chains, to cut out intermediatewholesalers52. Further, over 30 multinational companies in India are opening retail pharmacy chains,threateningthesustainabilityofindependentretailpharmaciesthatmaybeunabletocompeteonpriceandtradeterms53.

51PriceWaterHouseCooper."GlobalPharmaLookstoIndia:ProspectsforGrowth."52VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,201053PriceWaterhouseCooper.“IndiaPharmaInc:CapitalisingonIndia’sGrowthPotential.”2011

Figure 2: Private sector drug supply chain in India Sources: Eric Langer and Abhijeet Kelkar. “Pharmaceutical Distribution in India.” BioPharm International, September 2008; Roger Jeffery et al. “Pharmaceuticals distribution system in India. “ Centre for International Public Health Policy, July 2007

RegulatoryEnvironment

KeyBarriers

• PoorgovernancestructureshaveledtoalargelyunregulatedprivatehealthsectorinIndia,whichhasledtoalargeproportionofhealthdeliveryprovidedbyunqualifiedRuralMedicalPractitioners(RMPs)andtheindiscriminateuseofdrugssuchasantibiotics

• Zinc isnotclassifiedasanover‐the‐counter(OTC)drug, limitingdistributionoftheproductto licensedchemists,direct‐to‐consumermarketingactivities,andacommerciallyavailableORS/zincco‐pack

• ORS and zinc are not included in all the various Standard Treatment Guidelines (STG) for diarrheatreatment,leadingtoconfusionamongsthealthcareproviders

• Decentralizeddrugregistrationhasledtotheintroductionofsub‐optimalformulationsintothemarket

IndianPharmaceutical/HealthcareRegulatoryOverview

Providers

Indiahasahighlyactiveprivatehealthmarket,muchofwhichisstillunregulated.Thoughacomprehensiveandwell‐intentionedlegalframeworkhasbeenestablishedtoprotectpatients,enforcingregulationsthroughadministrativeandbureaucraticcontrolsislimited54.Inrecentyearsnewapproachestoregulationhavebeenintroduced,includingaConsumerProtectionAct(1986)andaRighttoInformationAct(2005),bothofwhichintendtoencouragecitizenfeedbackandhealthdeliverythroughformalchannels.The2002NationalHealthPolicy included decreasing inequities in health as one of its principal objectives, and called for greaterinvestment in primary health care and ‘‘implementation of statutory regulation’’ and ‘‘monitoring ofminimumstandards’’intheprivatesector(GovernmentofIndia,2002).Despitetheseefforts,theregulationofprices,qualityandquantityofhealthservicesintheprivatesectorisnoteasilyachievable,requiringlargevolumesofskilledhumanresourcesandtheimplementationofcomplexinformationtechnologysystemstocapturedata‐driveninformation55.In some cases, non‐state actors have formed to influence professional self‐regulation. This includes theIndianMedicalAssociation(IMA)andtheIndianAcademyofPediatrics(IAP),whicharebothvoluntaryorganizationsthatrepresenttheinterestsofqualified,allopathichealthcareprovidersinIndia.Over200,000providershaveobtainedmembershipwith the IMAand IAP,whichareorganized into three‐tier structure:national,stateanddistrict.Thismembershipentersindivdualsintoa“socialcontract”thatentailsabidingbythe organization’s Standard Treatment Guidelines (STG), and offers access to opportunities such asContinuingMedicalEducation(CME)seminars.Recognizing thestrengthand influenceof thesegroups, theGovernment of India (GoI) invites key members to participate in critical apprasials of various state andnationalhealthprograms56,57.Thoughunqualifiedhealthproviders,whichacccount for65%ofallprivatesectorproviders in India58,arelargely removed from these self‐regulation efforts, the difference in the quality of diarrhea treatmentbetweenqualifiedandunqualifiedproviderswasfoundtobemarginalinoneethnographicstudyconductedinNewDelhi,IndiabytheWorldBank59.Theauthorsfoundthatoftheunqualifiedprovidersobserved,only

54DavidH.PetersandV.R.Muraleedharan.“RegulatingIndia’sHealthServices:Towhatend?Whatfuture?”SocialScienceandMedicine,2008;66:2133‐214455Ibid56IndianAcademyofPediatrics(IAP).Web.AccessedonOctober12,2011.Availableat:http://www.iapindia.org/about‐iap/iap‐introduction57IndianMedicalAssociation(IMA).Web.AccessedonOctober12,2011.Availableat:http://www.ima‐india.org/IMA_history.html58CentreforPolicyResearch."MappingMedicalProvidersinRuralIndia:FourKeyTrends."February2011.59 Jishnu Das, Jeffrey Hammer, and Kenneth Leonard. "The Quality of Medical Advice in Low‐Income Countries." The World BankDevelopmentResearchGroup,Jan.2008.

20%completed theessential tasks fordiarrhea treatment, in comparison toqualifiedproviders,whowereawareof40%oftheessentialtasks,butonlycompleted25%ofthem.Itisimportanttonotethatthisfareshigh in comparison to public sector providers, who were aware of 30% of the essential tasks, but onlycompleted8%ofthem60.

Retailers

Both organized and unorganized pharmacies are represented under the All Indian Organization ofChemistsandDruggists (AIOCD).Theassociationrepresentsandsupports65%ofall thepharmaciesandstockists in the country61. Over the years, the organization has gained significant influence over decisionsaroundmanufacturer pricing and stocking of new products at the retail level. According to the Centre ofPublicHealth Policy,when a pharmaceuticalmanufacturerwants to launch a newhealth product into themarket,AIOCDdemandscashdonationsforeachstatechapterinexchangeforanapprovalletter,otherwise,thehealthproductcanbeexcludedfromretailerstocklists62.Thislevelofbureaucracycanleadtodelaysinthelaunchofnewhealthproductsandresultinmanufacturersintroducinglowprofitproductsinonlyselecthigh‐burdenstates.StructuredinterviewswithpharmacistsandwholesalersrevealedthatAIOCDisplanningtoconsolidateitsmembers(retailersandstockists)underacommonfranchisedbrandtoleverageeconomiesof scale for health products, infrastructure, sales and marketing. Though this effort has the potential tostrengthen the drug supply chain, improving consistent availability of drugs such as ORS and zinc, it isuncertainifsavingswillbepassedontotheconsumer63.TheAIOCD or the GOI do not actively engage in regulating retailers to ensure appropriate treatments aredispensedtopatientsthoughmisdiagnosisandtheoverprescriptionofdrugsiscommon64.Thoughdrugsaretechnicallyclassifiedunderpolicyschedulesthatoutlinewhetheraprescriptionforadrugisrequiredornot(see below), studies have shown that any drug can be purchased at the retail level with or withoutdocumentation.Inparticular,thishasledtotheindiscrimateuseofantibioticsforvariousailments,includingdiarrhea,contributingtotheincreasingriskofantibioticresistanceinthecountry65.Manufacturers

The Indian Drug Manufacturing Association (IDMA) represents the interests of 80066 domesticmanufacturersbynegotiatingwiththeGOIonissuesincludingpricecontrol,patents,R&D,qualityandGMPandexports.TheorganizationisalsoinvolvedinrevisingtheIndianPharmacopeia(IP),whichistheprimarymanual used by pharmaceutical companies for drug standards. Currently, the 2007 and 2010 IPs do notincludestandardsfororalzincsulphatetablets,whichmaybelimitingwidespreadknowledgeofthetechnicalspecificationsandbroadstandardizationofthisformulationamongstmanufacturers67.

At the government level, the Ministry of Chemicals & Fertilisers (MoC&F is responsible for draftingpharmaceuticalpoliciesintheinterestoftheprivatesectorandtheconsumer68.Currently,anewdrugpricinglegislationhasbeenproposedbytheMoC&F,whichwillimpactthediarrheatreatmentmarket(seebelow).

60 Jishnu Das, Jeffrey Hammer, and Kenneth Leonard. "The Quality of Medical Advice in Low‐Income Countries." The World BankDevelopmentResearchGroup,Jan.2008.61AllIndiaOrganizationofChemistsandDruggists(AIOCD).Web.AccessedonOctober12,2011.Availableat:http://www.aiocd.net/62RogerJefferyetal.“PharmaceuticalsdistributionsysteminIndia.“CentreforInternationalPublicHealthPolicy,July200763Ibid64DavidH.PetersandV.R.Muraleedharan.“RegulatingIndia’sHealthServices:Towhatend?Whatfuture?”SocialScienceandMedicine,2008;66:2133‐214465Ibid66IndianDrugManufacturingAssociation(IDMA).Web.AccessedonOctober13,2011.Availableat:http://www.idma‐assn.org/67GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother2011;2:225‐968MinistryofChemicals&Fertilizers,GovernmentofIndia.Web.AccessedonDec10,2011.Availableat:http://www.fert.gov.in/aboutus/history.asp

DrugRegistrationandClassification

ThekeylegislationforpharmaceuticalregulationistheDrugsandCosmeticsAct(DCA)69anditssubordinatelegislation, theDrugs andCosmeticsRules (DCR)70. TheMinistryofHealth andFamilyWelfarewithin theCentralGovernment enforces this legislation and it applies to all imported anddomesticallymanufacturedallopathic,ayurvedicandhomeopathicmedicines.TheDrugControllerGeneralofIndia(DCGI)isprimarilyresponsibleforapprovingnewdrugs,molecules,newusagesandclaimsandclinicalresearchandtrials71.TheDCGI also classifies drugs into various schedules to regulate the prices and sales channels throughwhichthesedrugscanbesoldtotheconsumers.Figure2providesanoverviewofthedrugschedulingstructureinIndia.

Intermsofdiarrheatreatment, theDCGIhasclassifiedORSasScheduleK,orotherwiseknownasanOver‐The‐Counter(OTC)drug72(Figure3).ThismeansthatORScanbepurchasedatanyshop,includinglicensedpharmaciesinIndiawithoutaprescriptionandmarketeddirectlytoconsumers.Marketingactivitiesshouldfollowinlinewiththeethicalguidelinesoutlinedbythe“DrugsandCosmeticAct,1940”73andthevoluntarycode of conduct established by the Organization for Pharmaceutical Producers of India (OPPI), which

discourages claims that exaggerate theefficacy of a drug74. Zinc, in comparisonhasnotbeenformallycategorizedinadrugschedule. Although this discrepancy doesnot entirely limit the availability of theproductatlicensedpharmacies75,,directtoconsumer marketing and distribution tonon‐medical retailers (e.g. grocery stores)is not permitted for zinc until Schedule Kstatus is in place. As a result, demandgeneration activites for zinc has beenlimited. Forinstance,apilotprojectledinthree districts that aimed to increaseaccess to diarrhea treatment through adistribution network of 70 mobile femaleentrepreneurs successfully increased ORSsales by 164% fromMay to July 2009but

couldnot includezinc in theprogramduetoitsambiguousregulatorystatus76.

In contrast, antibiotics, which arecommonly prescribed for diarrhea

treatment,areclassifiedas“prescriptiononly,”whichmeanstheyshouldonlybesoldatlicensedpharmacies

69MinistryofHealthandFamilyWelfare,DepartmentofHealth,GovernmentofIndia.“TheDrugsandCosmeticsActandRules,1940.”CorrecteduptoApril30,2003.Availableat:http://cdsco.nic.in/html/copy%20of%201.%20d&cact121.pdf70MinistryofHealthandFamilyWelfare,DepartmentofHealth,GovernmentofIndia.“TheDrugsandCosmeticsRules:ConditionsofLicenseforCosmeticManufacturing,1945.”Availableat:http://www.drugscontrol.org/cond_mfg_cosmetics.pdf71VijayBhangale.“OTCMarketingofDrugs.”InternationalMarketingConferenceonMarketing&Society,April8‐10,2007.Availableat:http://dspace.iimk.ac.in/bitstream/2259/347/1/397‐402.pdf72ItisimportanttonotethatthisdrugclassificationisnottheWHOLow‐OsmolarityORSformulation73MinistryofHealthandFamilyWelfare,DepartmentofHealth,GovernmentofIndia.“TheDrugsandCosmeticsActandRules,1940.”CorrecteduptoApril30,2003.Availableat:http://cdsco.nic.in/html/copy%20of%201.%20d&cact121.pdf74OrganisationofPharmaceuticalProducersofIndia(OPPI)."OPPICodeofPharmaceuticalMarketingPractices2010."Web.AccessedonApril4,2012.Availableat:http://www.indiaoppi.com/memrfildat/publications834845dre/OPPI%20Marketing%20Code%202010%20‐%20Complete%20‐%20Final‐Final.pdf75RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."200876AnandSinha.“LeveragingbaseofthepyramidentrepreneursforORSinIndia.”USAID,2010

Figure 3: Overview of drug status schedules in India Source: Ministry of Health and Family Welfare, Department of Health, Government of India. “The Drugs and Cosmetics Act and Rules, 1940.” Corrected up to April 30, 2003

and to patients with a prescription from a provider. Though the products are commonly sold without aprescription,distributionandavailabilityoftheproductsarewidespread,especiallyinruralareas77.

Recently,therehasbeengrowingmomentumaroundsecuringscheduleKstatusforzinc.Atameetingheldby theClinicalDevelopmentServiceAgency (CDSA)andDepartmentofBiotechnology (DBT) inNewDelhi,India(MeetingofSuppliersofzincTabletsfortheTreatmentofChildhoodDiarrhea)inAugust2011,theDCGIcommitted to consideringScheduleK statusof zincprovided theappropriatedocumentationandevidencewassubmitted.Sincethen,variousNGOshavemadeplanstosubmitformalapplications.While the office of the Drugs Controller General of India (DCGI) is responsible for approving all newmolecules and unique new formulations at the central level, it is the Department of Food and DrugAdministration (FDA) in every state that has the authority to issuemanufacturing and selling licenses topharmaceuticalmanufacturers78.InterviewswithleadingpharmaceuticalmanufacturersandsubcontractorsrevealedthatthestateFDAsdonotusuallyenforcedrugqualityregulationswiththesameintensityastheDCGI and that manufacturers exploit this decentralized registration system to introduce irrationalformulationsintothemarket.AccordingtotheGOI,approximately10%ofIndia’stotalpharmaceticalmarketis substandard; theWHO’s figuresarehigher79.For instance,products thatcombineORSandzincandORSandProbioticintoapowderformulationhavebeenfoundonthemarket,thoughtheyhavenotbeenclinicallytestedforefficacy.TheseinappropriateformulationsnotonlyimpactconsumerconfidenceintheefficacyoftheWHOtreatmentfordiarrheamanagement,butalsothreatenthehealthofchildrenwhousetheproduct.

StandardTreatmentGuidelines

ORS and zinc have been included and endorsed as the preferred treatments for diarrheamanagement byvarious regulatory bodies including the Indian Academy of Pediatrics (IAP) in 2003, the IntegratedManagement of Neonatal and Childhood Illnesses (IMNCI) strategy, the National Rural Health Mission(NRHM) commodities list, and the National Program for Treatment for Diarrhea in 200780. However,accordingtotheWorldHealthOrganization(WHO),thisdirectivehasnotbeenunanimouslyadoptedacross“official”policydocumentsinIndia,leadingtoconfusionamongststakeholderssuchasproviders,non‐profitorganizations and government personnel about the appropriate treatment for diarrhea81. Firstly, the 2011National Essential Medicines List only includes the syrup formulation of zinc. Secondly, the IndianPharmacopeia (IP) 2007 and2010 andNational Formulary of India (NPI) 2010does not include oral zincsulfate.Lastly, theStandardTreatmentGuidelines(STG)broughtoutby theArmedForcesMedicalCollege,Pune,incollaborationwithMinistryofHealthandFamilyWelfare,GOI,doesnotlistzincasatreatmentfordiarrhea management82. The lack of consistent alignment on the appropriate treatment for diarrheaundermineseffortstosignificantlyscaleupzincandORS.

DrugPriceControlOrder

The pharmaceuticalmarket in India is extremely price‐sensitive, and is considered to be one of themostprice‐controlledintheworld83.Thepriceofdrugsareestablishedinoneoftwowaysinthecountry.ThefirstiswhentheDrugPriceControlOrder(DPCO)identifiesanactivepharmaceuticalingredient(API)thathasalarge market size (between ~ $USD 200,000 – 800,000 market), but is dominated by one player (singleformulationowning90%marketshareormore).ThistypeofAPIbecomesclassifiedasa“scheduleddrug”

77AnitaKotwaniandKathleenHolloway.“TrendsinantibioticuseamongoutpatientsinNewDelhi,India,”BMCInfectDis.2011;11:99.78VijayBhangale.“OTCMarketingofDrugs.”InternationalMarketingConferenceonMarketing&Society,April8‐10,2007.Availableat:http://dspace.iimk.ac.in/bitstream/2259/347/1/397‐402.pdf79AllaKatsnelson.“Substandarddrugsovershadowedbyfocusonfakes,”NatureMedicine,2010;16:36480GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother

2011;2:225‐981Ibid82GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother2011;2:225‐983AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.

andissubjecttoapricingformulatoestablishitsMaximumRetailPrice(MRP)84.Currently,thereare76outof500APIsthatfallintothiscategory,whichincludes37ofthethe348drugsontheNationalListofEssentialMedicines (NLEM). Of these 37 drugs, three are common antibiotics, ciprofloxicin, metronidazole, andnorfloxicin,which are sometimes inappropriately prescribed/utilized for diarrhea treatment. For all otherdrugs,called“non‐scheduled,”manufacturerssettheMRPandregisterthepricewiththeNPPA;pricescanberaisedbya10%maximumeachyear85.

Theformulaforscheduleddrugsdefinesthemaximummark‐upsforwholesalersandretailers,whichis8%and16%,respectfully.Thoughnotlegallymandated,theaveragemark‐upfornon‐scheduleddrugsis10%forwholesalersand20%forretailers86(Table2).

Alldrugsaresubjecttoa16%excisedutyleviedbythegovernmenton57.5%oftheMRP,inadditiontoa3%taxusedto improveeducation in India.Ateach levelof thesupplychain,drugsaretaxedanadditional4%(VAT).However, at each level taxed,VAT is refunded to theprevious levelwith the exceptionof the finalpointofsaleinthepublicandprivatesectors,whichnegativelyimpactsprocurementvolumesandconsumeraffordability87.

TheNationalPharmaceuticalPricingAuthority(NPPA)managestheenforcementofthepolicybymonitoringdrugpricesofscheduleddrugsusingIMSdata.However,theWHOhasrecentlyexpresseddisapprovalofthisprocess,statingthatwhileIMSvolumedataisaccurate,itspricingdatadoesnottakeintoaccount“discounts,rebates,andbundlingdeals”sincethedataiscollectedatthewholesalerlevel88.

In2007, theDepartment for InternationalDevelopment (DFID),UnitedKingdom,conductedadrugpricingstudy inNewDelhi, India to examine the level of enforcement of theDPCO89. The author investigated thepricingofthreescheduleddrugs,Ciprofloxicin,RanitidineandSalbutamol,andfoundthattwohadwholesalemarginsclosetothemandated8%.Antibiotic,ciprofloxicin,ontheotherhand,wasfoundtohaveamarginof11%.Retailmarginsweremuchhigherthantheprescribed16%maximum,especiallyforbranded‐genericsnotmarketed bymanufacturers, ranging from92‐436%.Margins at thewholesale level for non‐scheduleddrugs studied were found to align with the unofficial maximum mark‐up (10%). However, similar toscheduleddrugs,therewasawiderangeinmarginsattheretaillevel,withnon‐scheduledbrandedgenericshavinghighermarginsthannon‐scheduledbrandeddrugs90.

84Ibid85AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.86EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008.87AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternational

Development(DFID),April2007.88LynneTaylor.“WHOwarnsIndiaoverdrugpricingdata,”PharmaTimes,January17,2012.Web.AccessedonFebruary10,2012.Availableat:http://www.pharmatimes.com/Article/12‐01‐17/WHO_warns_India_over_drug_pricing_data.aspx89AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.90Ibid

Maximum drug margins established by the NPPA

Scheduled Drugs Non-scheduled Drugs

Wholesaler

8% on the maximum retail price


Retailer



Table 2: Overview of maximum margins established by NPPA for scheduled and non-scheduled drugs Source: Eric Langer and Abhijeet Kelkar. “Pharmaceutical Distribution in India.” BioPharm International, September 2008.

Therangeinmarginsis largelydeterminedbyifadrugismarketedornot.Productsthatarenotmarketedaresoldatamuchlowerratetowholesalers(i.e.superstockists,stockists,sub‐stockists),whointurnselltopharmacies/retailshops.Promotion,inthesecases,istheresponsibilityofthesuper‐stockistorretailer.Ifaproduct is marketed, the cost of promotion will either be absorbed by the pharmaceutical manufacturer,acrossthesupplychainorpassedontotheconsumer91.Manufacturingcosts,incontrast,playlessofaroleindeterminingtheMRPofadrug.

In the case of diarrhea treatment,most leadingORSbrands on themarket are not actively promoted, andmarginsacrossthesupplychainforasmallsachetareestimatedtorangefrom75%‐533%.Thisdatawasdrawnfromtwosources;firstly,theTamilNaduGovernmentprocuresasmallsachetofORSfor$USD0.03292andsecondly,non‐profitpharmaceuticalcompanyLOCOSTsellsasmallsachetofORS for$USD0.0893.Therange inretailprices foronesmallsachetofORS(4.4‐5g) isbetween$USD0.07–0.10.Therange inretailpricesforonelargesachetofORS(~20g)isbetweenUSD$0.20‐$0.3594.

Interviewswiththreeleadingzincmanufacturersillustratedavariationinpromotionactitiviesfromlimitedinvestmenttosignificantinvestmentduringthediarrheaseason,tothosewhoreceivedmarketingsubsidiesfrom international aid donors. One manufacturer that invests in marketing activities during the diarrheaseasonreportedabsorbingthecostofpromotion, takinga15%margin,versusa30%marginandthusnotimpactingthemarginsavailableacrossthesupplychain.Thoughthemanufacturingcostofzincwasunabletobeobtained fromkey informants,TamilNadugovernmentprocures100 tabletsof zinc sulphate for$0.27,whichcanbeconsideredonedatapointforthepossiblemanufacturingcostofzincsulphate95.Retailpricesfor10tabletsofzincsulphaterangefrom$0.45‐$0.6596.

NationalPharmaceuticalPricingPolicy

TheDPCOwasestablishedinIndiain1979tocorrectmarketfailuresandensureaccessibilitytotreatment,initially controlling the price of over 300 bulk drugs. Over the years, however, the policy has increasinglybeendismantledwithfewerdrugsbeingcontrolledandpharmaceuticalcompaniesavoidingpricecontrolsbymakingminoradjustmentstotheformulationofdrugsonthescheduledlist.Thesecircumstanceshaveledtodiscord between consumer organizations such as the All India Drug Action Network (AIDAN) andpharmaceutical industry interestgroupssuchas the IndianPharmaceuticalAlliance(IPA); the latterurgingtheDPCOtoexpandthenumberofscheduleddrugstoincludeallthoseontheNLEM,whichincludesORSandzinc,andtheformerarguingthatthereisenoughcompetition(20,000companies;60,000brands)forpricestobemodulatedbythemarketitself.

Since2011,however,anewdrugpricinglegislation,draftedbytheDepartmentofPharmaceuticalswithintheMinistryofChemicalsandFertilizers,GOI,calledthe“NationalPharmaceuticalsPricingPolicy(NPPP)2011”isunderreviewbytheIndianSupremeCourt.Thenewpolicyproposestoregulatethepricesofall348drugsonthe2005NLEMandothersaddedtothe2011NLEMbysettingaceilingpriceforeachdrug.Thisceilingpricewouldbecalculatedbytakingtheweightedaveragepriceofthethreeleadingbrandsofthedrug.Ifthepolicy is finalized, nearly 75% of the domestic indian pharmaceutical market will be under price control(1,154drugsand6,441formulations),leadingtoanestimatedrevenuelossof$USD600billion97.

Public interest groups have expressed concerns with the proposed policy. The AIDAN has filed a PublicInterestLitigation(PIL)againsttheNPPP,claimingthatthepricingmethodologywillleadtoincreasedprices

91Interviewswithpharmaceuticalmanufacturers,October201192GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother2011;2:225‐993LOCOSTIndia."PriceList,"2011.Availableat:http://www.locostindia.com/94AED.“ORSProducersMatrix.”UpdatedSeptember16,201195GitanjaliB,WeerasuriyaK.Thecuriouscaseofzincfordiarrhea:Unavailable,unprescribed,andunused.JPharmacolPharmacother2011;2:225‐996AED.“ZincProducersMatrix.”UpdatedSeptember16,201197LynneTaylor.“Indiandrugmakersurgegovernmentoverpricecontrols,”PharmaTimes,December8,2011.Web.AccessedonFebruary10,2012.Availableat:http://www.pharmatimes.com/Article/11‐12‐08/Indian_drugmakers_urge_govt_over_price_controls.aspx

of some essential medicines since market leaders are often the highest priced products. The IndianPharmaceuticalAlliance(IAP)warnsthatregulationofthenewpolicywillbe“ineffectiveandunwieldy”andlost revenuemay result in reduced capacity to invest in domestic drug innovation. The GOI contests thatrevenueswillberecoveredthroughincreasedspendinginpublicprocurementofdrugs,from0.1%to0.5%ofIndia’sGrossDomesticProduct(GDP)andcentralizationoftheprocurementsystem98.

If the policy passes, the diarrhea treatment market will be impacted. ORS, zinc and common antibiotic,ciprofloxicinareon theNLEM.Though the retailpricesofORSandzincarenot expected to rise, since therange between highest and lowest price is minimal, prices of alternative diarrhea treatments not on theNLEM,suchasofloxacin‐ornidazole,loperamide,andracecadotril,couldrisetorecoverrevenuelosses.

98LynneTaylor.“Indiaplanstopricecontrol60%ofpharmamarket,”PharmaTimes,November1,2011.Web.AccessedonFebruary10,2012.Availableat:http://www.pharmatimes.com/Article/11‐11‐01/India_plans_to_price‐control_60_of_pharma_market.aspx

Manufacturing

KeyBarriers

• The ORS and zinc market is dominated by five companies that invest limited resources in the sales,marketingandexpandeddistributionoftheproducts

• ORS and zinc compete with common, high‐margin, alternative diarrhea treatment products includingantibioticsandanti‐diarrheals.IncreasinguptakeofORSandzincwillrequireproductdisplacement

• ORSandzincareconsideredlowpriorityproducts forpharmaceuticalcompaniesduetoperceivedlowconsumerdemand,andcompetingpriorities

There are over 20,000 pharmaceuticalmanufacturers in India,ofwhichapproximately200 companies control 70%of themarket99. In2010, the top pharmaceutical companies in

India,inorderoflargestmarketshare,were:Cipla,Ranbaxy,GSK India, Piramal Healthcare, Sun Pharma, Zydus Cadila,Alkem Labs, Pfizer India, Mankind Pharma, and Abbott.Increasingly, multinational pharmaceutical companies areinterested in the Indiapharmamarket toestablishstrategicpartnerships and licensing deals, and consider acquisitionopportunities. Between April 2000 and April 2010, theIndianpharmaindustryattractedUS$1707.52millionworthofforeigndirectinvestment100.

Treatments used for diarrhea fall under the gastrointestinal, anti‐infective, vitamins/minerals and othertherapeuticgroups,whichtogetheraccountfor48%oftheIndianpharmaceuticalmarket.ThisincludesORS,zinc,anti‐diarrheals,antibiotics,probioticsandayurvedicproducts,whicharecollectivelymanufacturedby270 companies in India. In September 2011, the Moving Average Total (MAT) of the diarrhea treatmentmarketforadultandpediatricpopulationswasvaluedatUS$260million,ofwhich15companiescontrolled60% of the market. Antibiotics are the largest therapeutic segment in the diarrhea treatment market,

99MinistryofIndustryDepartmentofCommerce,GovernmentofIndia.“Strategyforincreasingexportsforpharmaceuticalproducts:ReportofTaskForce.”December2008100VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,2010

16% 2%

52%

7%

23%

Diarrhea Treatment Market September 2011 MAT

ORS

Zinc

Antibiotics

Antidiarrheals

Probiotics

Indian Pharmaceutical Market 2001-2012

Figure 4: Overview of India’s Pharmaceutical Market

Figure 5: Overview of Diarrhea Treatment Market in India Source: ORG/IMS Data, September 2011 MAT

accountingforover50%ofthetotalannualrevenue,whichisdoublethevalueofORSandzinccombined101.Nearly 60‐80%of annual sales for diarrhea treatments are generated betweenMarch and July, during themonsoonseasoninIndia102.

Interviewswith leadingdiarrhea treatmentpharmaceuticalmanufacturers indicated thatORSandzinc areconsidered low‐to‐medium priority products103. Many companies entered the ORS and zincmarket at therequestoftheGOIandIAPwhentheWHOreviseditsdiarrheamanagementguidelinesinthe1980sandagainin 2004104. Other manufacturers produce ORS and zinc to offer providers with a “complete diarrheamanagement” solution,which also includes anti‐diarrheals andprobiotics. Since then, increases inmiddle‐classwealthandchangesintheIndiandiseaseprofilehaveshiftedinternalprioritiestowardshigher‐marginchronicdiseasetherapeuticsegments.CompaniesthatmanufactureORSandcontrolasubstantialshareofthemarketconsidertheproducts“cashcows,”andthusinvestlimitedresourcesintosalesandmarketing.Zinc,on the other hand, is considered a new opportunity for the leadingmanufacturers in themarket, thoughcommercialmarketinghasbeen limitedduetothecurrentdrugclassificationof theproduct.The followingoutlinesthemarketdynamicsforeachdiarrheatreatmentproductcategoriesinmoredetail.

OralRehydrationSalts

Market Size: In September 2011, the MAT forthe ORS market in India was estimated to beworth approximately $US37million. In the sameperiod, 214 million units of ORS were soldnationally105. By 2015, the ORS market forpediatricdiarrheaalonehasthepotentialtoreachapproximately$US67million106.

Market Share: There are 52 pharmaceuticalmanufacturers of ORS in the Indian market.Pharmaceutical company FDC Limited is theindustry leader of ORS, both in terms ofmarketshare and the number of formulations/brandsavailable. Its cornerstone product, Electral,accounts for 53% of all ORS units sold in Indiaand in some regions has become a generictrademark (Figure6). Theproduct’s topmarketpositionhasledtoalongtailofadditionalbrandsand formulations. However, due to its existing position in the market, the company engages in limitedmarketingactivitiesandisfocusedonexpandingits50‐countryexportportfolio.OtherORSmanufacturers,inorderoflargestmarketshare,include:WallacePharmaceuticals,JuggatPharmaandMerckLimited107.

101ORG/IMSData,September2011.*ThedatacollectionmethodologyutilizedbyORG/IMSdoesnotallowforadistinctionbetweenthemarketforpediatricandadultdiarrheatreatments102Interviewswithpharmaceuticalmanufacturers,October2011103Ibid104ICICIFoundationandUSAIDIndia."SaathiBachpanKe:PromotingDiarrheaManagementthroughthePrivateSectorinUrbanNorthIndia."2008105ORG/IMSData,September2011

106Basedontreatmentof80%ofU5pediatricdiarrheaepisodesinIndiawithtwo20gORSsachetsatamanufacturersellingpriceof$0.086.Incidenceratesource:Boschi‐PintoC,LanataCF,BlackRE(2009)TheGlobalBurdenofChildhoodDiarrhea.MaternalandChildHealth(J.E.Ehiri(ed.),225‐43.Pricingdatasource:MSHInternationalDrugIndicatorGuide,2010107ORG/IMSData,September2011

Figure 6: ORS Market Share by Pharmaceutical Manufacturer in India Source: ORG/IMS Data, September 2011 MAT

Formulations:TherearefourtypesofORSformulations:powder,liquid,tabletanddrops(Table3).Powdersachetsaretheleadingtypeofformulationinthemarket,with50manufacturersproducingtheproduct(SeeTable3).Thoughsomemanufacturersexpressedthatcaregivershavebeenfoundtopreferpre‐madeliquid

formulations due to thelack of access to cleanwater, the product isincreasingly beingdiscontinued due to highstorage and distributioncosts108. In 2004, whenthe WHO treatmentguidelineswere revised tolow‐osmolarity ORS, the

Government of India, IAP andUSAID encouraged leadingmanufacturers to switch to thenew formulation.ThoughthetotalnumberofmanufacturerscurrentlyproducingL‐ORSisunavailable,companiesFDC,WallaceandMerck Limited, which account for 70% of themarket, all switched to the L‐ORS formulation in 2007undertheSaathiBachpanKeprogramledbyUSAID109.

To differentiate ORS in the crowded marketplace, manufacturers have introduced a range of flavors andinnovativetypesofpackaging.Forinstance,pharmaceuticalmanufacturer,Dr.Reddy’sLaboratoriesandRPGLife Sciences sells five sachets of orange‐flavored ORS in a 200ml tumbler for easy measuring andadministration. Productsmixing ORSwith probiotic or zinc have been found on themarket, though theseproducts have not been supported by clinical evidence to date. An undisclosedmanufacturer is currentlyconductingR&DonatabletORSformulation.

SalesandMarketing:PharmaceuticalmanufacturersdonottypicallyinvestinsalesandmarketingactivitiesforORS.Giventheproduct’s long‐standinghistoryinIndia,andhighawarenessamongstpublicandprivateproviders,110 detailing activities are not common, or considered high impact relative to detailing for otherhigher‐marginproducts.That said,during thediarrhea season (March‐July), somemanufacturerswillofferproviders and retailers trade schemes forORS, such as “buy10, get 1 free.” Every year, the IAP organizes“ORSweek”duringthemonsoonseasontoreminditsmembers,mostlyqualifiedproviders,toprescribeORS.Each year, a specificmessage is emphasized throughCMEs and community events, encouraging theuse ofzincwithORS,anddiscouragingtheuseofantibioticsfordiarrheatreatment.Pharmaceuticalmanufacturersoften support the IAPwith free samples to distribute duringORSweek111. Between 2002‐2005, a public‐private partnership between USAID and ICICI Foundation, the GOI, McCann Healthcare and ninepharmaceuticalmanufacturers, launcheda socialmarketing campaign in theurbanareasofNorth India tointroduce and encourage adoption of the new L‐ORS formulation introduced into the WHO guidelines in2004.Through theuseofdiversemassmediachannels (i.e. television, radio,print),providerdetailing,andcommunity‐basedinterpersonalactivitiessuchasstreettheater,theuseofL‐ORSincreasedfrom25%to45%inurbanareasand59%to88%inurbanslums.SalesofORSgrewby10%annuallyforthedurationoftheproject.

108Interviewswithpharmaceuticalmanufacturers,October2011109ICICIFoundationandUSAIDIndia."SaathiBachpanKe:PromotingDiarrheaManagementthroughthePrivateSectorinUrbanNorth

India."2008110UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009111Interviewswithpharmaceuticalmanufacturers,October2011

Formulation Number of Manufacturers

Number of Brands

Total units (Sept 2011 MAT)

Market Share (%)

Powder 45 61 173,609,000 78.5 Liquid 18 23 40,443,000 18.3 Tablet 2 2 43,000 0.02 Drops 1 1 1,000 0 Total 52 87 214,096,085 100

Table 3: Overview of ORS market in India. Source: ORG/IMS, September 2011 MAT

ZincTherapy

MarketSize:InSeptember2011,theMATforthe zinc market was estimated to be worthapproximately $US4.2million112. In the samemonth, approximately 7million units of zincweresoldnationally.Accordingtooneleadingpharmaceutical manufacturer, the zincmarket is experiencing between 20‐25%year‐over‐year growth. Similar to ORS, thereis vast potential for growth in this marketgiventhehighnumberofdiarrheaincidencesin India and the current low uptake rates(<2%). The market for zinc for pediatricdiarrheaalonecanreachuptoUS$61millionby2015113.

MarketShare:Thereare23manufacturersofzinc in India,with fivecompaniescontrollingnearly 80% of the market. This includes, inorder of market share: Zuventus Healthcare,

WallacePharmaceuticals,Dr.Reddy’sLaboratories,FDCandMankindPharma114.

Formulations:Manufacturersareproducingfourtypesofzincformulations:syrup,powdersuspensionanddispersible and non‐dispersible tablet formulations (Table 4). In general, caregivers prefer the syrupformulation since water is not required for preparation115. Accordingly, syrups account for 80% of themarket116. Similar to ORS, flavored zinc has been introduced to mask the traditionally bitter taste of theproductandincreaseacceptabilitybycaregiversandchildren.

Formulation Number of Manufacturers

Number of Brands Total units (Sept 2011)

Market Share (%)

Syrup 19 19 5,747,140 81.3%

Tablet 12 12 1,314,350 18.6%

Total 23 31 7,061,490 100

SalesandMarketing:Certainleadingpharmaceuticalmanufacturersinthezincmarketviewtheproductasanopportunitytorefreshthediarrheatreatmentmarket,andareinvestingresourcesinsalesandmarketingactivitiestargetingproviders.Interestinthezincmarketbeganin2006,attherequestofIAPandfollowingthe inclusionofzinc intheNLEMat theendof2007117.Forothers,manufacturingzinc ispartofabroaderstrategyaimedatmarketingacomplete“diarrheamanagementsolution”tocaregiversandproviders,whichcanincludeORS,zinc,aprobioticand,insomecases,ananti‐diarrheal118.

112ORG/IMSData,September2011113Basedontreatmentof50%ofU5pediatricdiarrheaepisodesinIndiawithten20mgzincdispersibletabletsatamanufacturersellingpriceof$0.031pertablet.Incidenceratesource:Boschi‐PintoC,LanataCF,BlackRE(2009)TheGlobalBurdenofChildhoodDiarrhea.MaternalandChildHealth(J.E.Ehiri(ed.),225‐43.Pricingdatasource:MSHInternationalDrugIndicatorGuide,2010114ORG/IMSData,September2011115Interviewswithpharmaceuticalmanufacturers,October2011116ORG/IMSData,September2011117ICICIFoundationandUSAIDIndia."SaathiBachpanKe:PromotingDiarrheaManagementthroughthePrivateSectorinUrbanNorthIndia."2008118Interviewswithpharmaceuticalmanufacturers,October2011

Table 4: Overview of zinc market in India. Source: ORG/IMS, September 2011 MAT

Figure 7: Zinc Market Share by Pharmaceutical Manufacturer in India Source: ORG/IMS Data, September 2011 MAT

28%

20% 18%

6%

5%

23%

Zinc Market Share September MAT

ZUVENTUS PHARMA

WALLACE

DR REDDYS LABS

FDC

MANKIND

OTHER

Promotion of zinc bymanufacturers includes provider‐detailing activities during the diarrhea seasonwithnationalsalesforcesrangingbetween250–800people,thoughmostlylimitedtoqualifiedprovidersinClass1andClass2towns(>100,000people).Manufacturersalsoreportedparticipatingatvariousconferencestopromote zinc, and partneringwith NGOs to expand distribution to rural areas. Innovative approaches arebeing pursued to change prescribing behavior such as partnering with IAP to publish a magazine called“Zinconia Times” formembers and offering free samples to patientswhen they exit provider offices119. Ingeneral,marketingandsaleseffortshaveprimarilytargetedproviders,versusdirecttoconsumers,giventhecurrentambiguityofzinc’sregulatorystatus.

Antibiotics

MarketSize: Themarket size for antibioticsused for gastrointestinal treatment, whichincludes diarrhea, was valued at US$115.6millionovertheperiodofSeptember2010toSeptember 2011120. Approximately 202millionunitsweresoldduringthisperiod.

MarketShare:Thereare269manufacturersof antibiotics for gastrointestinal diseases inIndia,ofwhichthetop10companiesaccountfor 60% of the market. Leadingmanufacturers Mankind Pharma, MedleyPharma,Cipla,StancareandRanbaxyproduceonaverage11differenttypesofantibiotics.

119Interviewswithpharmaceuticalmanufacturers,October2011120Limitationsinthedatacollectionmethodologyprecludesanalysisofthe%ofantibioticssoldthatareinappropriatelyusedfordiarrheatreatmentinIndia

Box 1: Introducing zinc into the Indian market

A leading manufacturer describes the process taken to introduce zinc into the Indian market and influence provider prescription of the product. Although the company is experiencing 20-25% growth in YOY sales of zinc, the company believes that reinforcing consistent messaging to providers for the next 3-5 years is required for the zinc market to achieve its growth potential.

Step 1: Medical Representatives (MRs) targeted high prescribing providers with information about zinc, which included academic literature and flip charts illustrating the clinical efficacy of the product. This information was supplemented with incentives such as free samples, brand reminders (i.e. pens, prescribing pads), and knowledge grants. In general, a maximum of 10 minutes was spent with a provider on a detailing visit.

Step 2: Once the targeted provider agreed to prescribe zinc, the MR visited nearby and/or affiliated retailers and informed them of the provider’s willingness to prescribe the product. Zinc was then offered to the retailer on credit for a trial period to validate demand from providers.

Step 3: Following the initial dissemination of information to providers and product supply to retailers, MRs conducted frequent retail audits to verify that the provider was prescribing zinc. If behavior change was not observed, MRs continued to detail providers using alternative tactics and product messaging, until consistent demand was generated.

Step 4: MRs facilitate a larger order of zinc between the retailer and stockist, leading to increased and consistent availability of the product

Figure 8: Antibiotic Market Share by Pharmaceutical Manufacturer in India Source: ORG/IMS Data, September 2011 MAT

Formulations: Sixteen types of antibiotics were included in the September 2011 MAT dataset on thediarrhea treatment market from ORG‐IMS, though it is uncertain if this list if exhaustive. Antibiotics areavailable in three different formulations (solid, liquid, injection). Antibiotics, Ofloxicin‐ornidazole andCiprofloxicin‐tinidazole,both in solid formulation, account for50%of themarket.Ofloxicin‐ornidazoleandCiprofloxicin‐tinidazole have the highest number of manufacturers producing the product in thegastrointestinal market; 134 for the latter and 185 for the former. In general, the solid formulation ofantibioticsispreferred(73%)incomparisontoliquid(22%)andinjection(4%).

A study conductedbymarket research firm,MART, in threedistricts inUttarPradesh and twodistricts inGujaratsimilarlyfoundOfloxicin‐ornidazole,inadditiontoNorfloxasthemostcommonantibioticprescribedbyRuralMedicalPractitioners(RMPs)surveyed.Qualifiedproviders,ontheotherhand,prescribedarangeofantibiotics including Metronidazole, Ofloxicin, Co‐trimoxazole, Norfloxicin, Tinidazole, Furazolidone andOfloxicin‐Metronidazole121.

121MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy

(DAZT).”SubmittedtoAEDArts.2011

Cipro!oxacin-Ornidazole 3%

Cipro!oxacin-Tinidazole 17%

Furazolidone 0%

Furazolidone-Metronidazole

3%

Gati!oxacin-Ornidazole 0%

Levo!oxacin-Ornidazole 3%

Metronidazole-Nalidixic Acid

3%

Nalidixic Acid 0%

Nor!oxacin-Metronidazole 7%

Nor!oxacin-Tinidazole

5%

O!oxacin-Metronidazole 4%

O!oxacin-Nitazoxanide 3%

O!oxacin-Ornidazole 46%

O!oxacin-Tinidazole 2%

Rifaximin 4%

Tinidazole Doxycycline

0%

Antibiotics Market (For Diarrhea Treatment) September 2011 MAT

Figure 9: Market share by types of antibiotics in India Source: ORG/IMS Data, September 2011 MAT

Anti‐diarrheals

MarketSize:Themarket size fordrugsclassifiedasanti‐diarrheals by ORG/IMS was valued at USD$16million for the period of September 2010 toSeptember 2011. Approximately 83 million units ofanti‐diarrheals were sold. This diarrhea treatmentcategory includes Loperamide, an opioid drug thatreduces intestinal motility, and Racecadotril, anacetorphan that has an antisecretory effect on theintestine. Loperamide is strictly not recommendedfor children, and since 1980 the WHO has issued awarning to doctors in low‐resource settings to notuse Imodium for diarrhea treatment, since it canparalyze a child’s intestines122. A small randomizedcontrol trial found that racecadotril significantlyreduces the duration and volume of diarrhea inchildrenwhen used in conjunctionwith ORS, but todate, the WHO has not adopted this drug into itsguidelines123 and physicians have questioned thevalidityoftheresults124.

Market Share: There are 56manufacturers that produce anti‐diarrheals in India, 9 of whichcontrol85%ofthemarket.Thoughleading ORS and zincmanufacturers, FDC, Wallace,Juggat Pharma, WallacePharmaceuticals and ZuventusHealthcare have an anti‐diarrhealdrug as part of its portfolio, onlyDr. Reddy’s Laboratories hasgained significantmarket share inthis category (8%). Almost allmanufacturers were found toproduce either Loperamide orRacecadotril,withtheexceptionofMicro Labs, Cipla, JanssenPharmaceuticals, and TorrentPharmaceuticals. Micro Labsleads in sales of Loperamide and Torrent Pharmaceuticals and Dr. Reddy’s lead in sales of Racecadotril.Pharmaceuticalcompany,RPGLifeSciences,isthesoleproducerofanti‐diarrhealLomotil,whichispopularlyusedintheUnitedStatesofAmerica.

122NationalCancerInstitute,NationalInstitutesofHealth.Web.AccessedonJanuary3,2012.Availableat:http://www.cancer.gov/drugdictionary?CdrID=41911123Salazar‐LindoE,Santisteban‐PonceJ,Chea‐WooE,GutierrezM.Racecadotrilinthetreatmentofacutewaterydiarrheainchildren.NEnglJMed2000;343:463‐467. 124BhanMK.Racecadotril.IsThereEnoughEvidencetoRecommenditforTreatmentofAcuteDiarrhea‐Editorial.IndianPediatr2004;41:1203‐1204.

53%

3%

8%

35%

1%

Types of Anti-diarrheals in the India market September 2011 MAT

Loperamide

Loperamide-Furazolidone

Diphenoxylate-Atropin (Lomotil) Racecadotril

Loperamide/Simethicone

MICRO LABS 27%

TORRENT PHARMA

19%

RPG LIFE SCIENCES

8%

DR REDDYS

LABS 8%

HETERO HEALTHCARE

6%

GUFIC 6%

JANSSEN 5%

VERITAZ HEALTHCARE

4%

GENIX 4%

MANKIND 2%

OTHER 11%

Anti-diarrheal Market September 2011 MAT

Figure 9: Anti-diarrheal Market Share by Pharmaceutical Manufacturer in India Source: ORG/IMS Data, September 2011 MAT

Figure 10: Market share by types of anti-diarrheals in India Source: ORG/IMS Data, September 2011 MAT

Formulations:Anti‐diarrheal,Loperamideistheleadingdruginthiscategory,withvolumesalmostdoublethatofRacecadotril.Thedrugsinasolidformulation(80%)arepreferredinthemarket,incomparisontoapowder sachet (20%). Loperamide combined with antibiotics, such as Loperamide‐Furazolidone andLoperamide‐Metronidazole,arealsoavailable.

Sales and Marketing: Key informants from leading pharmaceutical companies confirmed that anti‐diarrheals, such as Loperamide or Racecadotril are generally included in the “complete diarrheamanagement” solutionmarketed to providers. Specific details on trade schemes for this drug category areunknown.

Probiotics

MarketSize:ThemarketforprobioticsinIndiawasvaluedat$US51millionduringtheperiodofSeptember2010toSeptember2011.Approximately139millionunitsweresoldnationally.Accordingtoa2009reportbyFrost&Sullivan, theprobioticsmarket in India isexpected togrowataCAGRof20‐25%until2015125.

Probioticsarestrainsofbeneficialbacteriathathelpmaintainintestinalbalance.Thehumangutishometomillionsofbeneficialbacteria,buttheseareoftendepleted due to chronic usage of antibiotics, junkfood or ailments such as diarrhea and indigestion.Ingesting probiotics allows the body to maintainbeneficial bacteria and prevent future episodes ofintestinaldiseases126.

MarketShare:Thereare83manufacturersintheprobioticmarketinIndia,ofwhichthetopfivecompaniescontroljustover50%ofthemarket.Thisincludes:SanofiAventis,USV,Dr.Reddy’sLabs,UniSankyoandTabletsIndia.Similartoanti‐diarrheals,leadingORSandzincmanufacturersMerckLimited,FDC,WallacePharmaceuticalsandMankindPharmaproduceprobioticproducts,butarenottopplayers.Further,probioticproductsareoftenimportedintoIndia127;suggestingtheincreasingnecessitytooffertheproductaspartofthediarrheatreatmenttherapybaskettoremaincompetitive.

Formulations:Fourmaintypesofprobioticsaccountfor40%ofthemarket.Theseinclude,inorderofmarketshare:lactobacillusacidophilus,saccharomycesboulardii,lactobacillussporogenes,andclostridiumbutyricum.Probioticsaremostcommonlysoldinasolidformulation(57%ofsales),thoughpowdersachets(29%)andliquid(14%)arealsoavailable.

SalesandMarketing:Aleadingmanufacturerisusingthetagline,“rehydrate,replenishandrefuel”tomarketitsORS,zincandprobioticproductsasthe“completediarrheamanagementsolution”.

DiarrheaTreatmentMarketOutlook

Leading pharmaceutical manufacturers are bearish on the scope for significant growth in the diarrheatreatment market. Though zinc is viewed as an opportunity to revive the diarrhea treatment market,manufacturers believe it will take between 5‐7 years of consistent messaging and promotion, increasedgovernmentcommitment,public‐privatepartnershipsandachangeintheregulatorystatusoftheproducttobroadlyandsustainablyshiftcaregiversfromdeeplyentrencheddiarrheatreatmentbehaviors,suchashome

125Frost&Sullivan.“NewProductInnovation:ProbioticsandNutraceuticals.”November30,2011126Ibid127Interviewswithpharmaceuticalmanufacturers,October2011

5%

14%

6%

64%

11%

Types of Probiotics September 2011 MAT

Clostridium Butyricum

Lactobacillus Acidophilus Lactobacillus Sporogenes Misc

Saccharomyces Boulardii

Figure 11: Market share by types of probiotics Source: ORG/IMS Data, September 2011 MAT

solutionsandantibiotics,tozinc.Ifthiscanhappen,manufacturersbelievethat“older”ORShasthepotentialtoridethecoattailsof“newer”zinc.128.

Further,thoughmanufacturersrecognizethatruralareasareunderservedandrepresentapotentialgrowthopportunityfordiarrheatreatmentsandotherdrugs,mostarereluctanttoinvestresourcesintoexpandingdistribution without evidence from a proven, profitable model. Consequently, some companies expressedbeingsatisfiedwiththecurrentrevenuesbeingearnedfromtheirdiarrheatreatmentportfoliosandarenotconsideringanysignificantadditionalinvestment129.

128Interviewswithpharmaceuticalmanufacturers,October2011129Ibid

Distribution

KeyBarriers

• Distribution of ORS and zinc does not extend beyond Class I and Class II towns (>100,000 people),limitingavailabilityoftheproductsinruralareas,whichexperiencesthehighestburdenofdiarrhea

• InfluencingdistributionofORSandzinciscomplexduetotheseverelyfragmentedsystem;thereareover60,000stockistsacrossIndia

The distribution of drugs in India is a highly fragmented system, with over 60,000 super‐stockists andstockists nationally130. A large pharmaceutical company conducts business with over 2,000‐5,000independentstockiststodistributeitsproductsacrossthecountry,employingtwodistributionstrategiesthatdifferdependingonhowadrugismarketed131.Thecharacteristicsofthesestrategiesaresummarizedbelow:

Vertically IntegratedDistribution: If amanufacturerchooses tomarketadrug, theproduct isdistributedthrough a controlled supply chain, with information technology systems to align supply with demandcreation.ProductsaredeliveredtocentralwarehouseslocatedinthenorthandsouthofIndia,followedbyanetworkofwholesalers,includingC&Fagents,stockistsandsub‐stockistswhoarecloselyaffiliatedwiththemanufacturer132.

Superstockist:Ifamanufacturerchoosesnottomarketadrug,theproductisdistributedtoasuper‐stockist,who is an independent business owner that operates similar to a regional warehouse. Often, the super‐stockist will establish relationships with a network of stockists and sub‐stockists to become “authorizeddistributors,” availing them of incentives such as volume discounts and lines of credit. A sales force,established by the super‐stockist, will manage the network of stockists and sub‐stockists to remaincompetitive.

ThesedistributionstrategiesarelargelylimitedtoClassIandClassIItowns(>100,000people),anddonotformally extend to rural and micro‐interior areas. Distribution in rural and micro‐interior areas operateunder a “demand‐led”distribution system,with fewproductsbeingdeliberately introducedandpushed torural areas. Often, within a block in a district of a state, 1‐2 large chemists will forge relationships withstockistsandoperateasamini‐wholesaler for theproviders (i.e. retailers,RMPs)situatedwithin theblock(~100), informallybecoming thekeysource fordrugs, creditand information.Asurvey in fourdistricts inUttarPradesh found that50%of retailers surveyedprocuredORS froma stockist, and27%procuredORSfromalargechemist133.ThissystemthreatensconsistentavailabilityofORSandzincinruralareasduetolowdemandfortheproducts.

RuralDistribution

Approximately742millionpeopleresideinruralareasinIndia,accountingfor67%ofthepopulation.Nearly80%oftheruralpopulationlivesonincomelevelsbelowUS$1.25perday134.

Currently,themajorityofgrowthinthepharmaceuticalindustryisconcentratedonurban(citiesandclassItowns)andperi‐urban(classIItoclassIV)areas,whichaccountfor33%oftheIndia’spopulation.Accordingto ORG/IMS Health, in 2010, peri‐urban areas contributed to 38% of total pharmaceutical sales, totalingUS$3.4billion,whileruralmarketsaccountedfor17%.Overthenext10years,ruralmarketsarepredictedto

130EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008.131AnitaKotwani,andLibbyLevison."PriceComponentsandAccesstoMedicinesinDelhi,India."DepartmentforInternationalDevelopment(DFID),April2007.132Interviewswithpharmaceuticalmanufacturers,October2011133 Rural Research Institute (SRI). "Market Survey on Market Availability and Uptake of ORS and Zinc for DiarrhoeaManagement."SubmittedtoUNICEF,2008.134PriceWaterhouseCooper.“IndiaPharmaInc:CapitalisingonIndia’sGrowthPotential.”2011

grow at a CAGR of 15‐20%, depending on how and if current challenges are overcome135. Whilepharmaceutical companies recognize this opportunity, only few have invested resources into building asustainable andprofitable ruralmarkets practice outside of corporate social responsibility initiatives. Thisreluctance isprimarilydue touncertaintyofprofitabilityasa resultofkeyruralmarketbarriers includingpoor infrastructure and the prevalence of unqualified providers, limited affordability and low caregiver

awareness about variousdiseases and treatmentoptions136.

Consequently, pharmaceuticalcompanies are increasinglypursuing public‐privatepartnershipstomitigatetheriskof these key rural marketbarriers and include innovativedistribution and marketingstrategies. The details of threeexistingmodelsaresummarizedbelow.

Arogya Parivar: Novartis’sArogya Parivar model has afour‐prong approach, whichincludes: a) partnering withNGOs to provide healtheducation to communities, b)

customizingthetypeandsizeofdrugstoa”cell”137,c)detailingprovidersandretailersandd)administeringdrug orders and micro‐credit by setting up local sub‐distributors. In June 2010, 270 cells had beenestablished in 11 states, impacting nearly 42million people in 28,000 villages, and the programmigratedfromaCSRinitiativetoaself‐sustainingprogramwithNovartis138,139.

DiarrheaAlleviationthoughtZinc&ORSTherapy(DAZT):LedbyFHI‐360inUttarPradeshandGujarat,theDAZTprogramdrawsfromtheexperienceoftheUSAIDPoint‐of‐UseWaterDisinfectionandZincTreatmentProject (POUZN), which took place between 2005‐2009. By mapping and engaging Rural MedicalPractitioners (RMPs) through frequent detailing by pharmaceutical manufacturer medical representativesand NGO field staff, the program aims to increase the uptake of ORS and zinc by changing providerprescribingbehavior.ThoughtheDAZTprogramisstillinprogress,resultsfromthePOUZNprojectindicatethat RMP prescribing and chemist stocking of zinc increased from 0% to 79% and 70% in the projectdistricts140.

ProjectShakti:AbtAssociates ledapublic‐privatepartnershippilotproject inthreedistricts in2009 withpharmaceutical manufacturer, PharmaSynth, and consumer packaged goods company, Hindustan Unilever(HUL),toexpanddistributionofORS.Byleveragingasubset(70)ofHUL’snetworkofShaktiEntrepreneurs,whoarewomeninruralareasthataretrainedtosellHULproductstothecommunity,ORSprofitandsalesincreasedby171%and164%,respectivelyinoneyearintheprojectareas141.

135Ibid136VikasBhadoria,AnkurBhajanka,KaustubhChakrobortyandPalashMitra.“IndiaPharma2020:Propellingaccessandacceptance,realisingtruepotential.”Mckinsey&Company,2010137Cell:100villagesover35sq.kilometerswithaverage180,000people138PriceWaterhouseCooper.“IndiaPharmaInc:CapitalisingonIndia’sGrowthPotential.”2011139Interviewswithpharmaceuticalmanufacturers,October2011

140POUZNProject.February2010.TreatingChildhoodDiarrhea in IndiawithORTandzinc:Engaging thePharmaceutical IndustryandPrivateProviders.Point‐of‐UseWaterandDisinfectionandzincTreatment(POUZN)Project,AED,Washington,DC.141AnandSinha.“LeveragingbaseofthepyramidentrepreneursforORSinIndia.”USAID,2010

Figure 12: Administrative division structure in India

ExpandingdistributionofORSandzinctotheprivatesectorinruralareaswillbecriticaltoscaling‐upaccessacrossthecountry.Lessonsfromandsynergieswithexistingmodelsshouldbedrawnonwhenestablishinganationalscale‐upstrategyinIndia.

ProviderBehavior

KeyBarriers

• Awareness of zinc as part of appropriate diarrhea management is low amongst private providers

(qualifiedandunqualified)• AwarenessofORSishighamongstprivateproviders(qualifiedandunqualified),butprescribingORSin

practiceislow• Conventional behavioral change practices have proven to be ineffective in increasing the prescription

rates of ORS and zinc. A research‐driven approach for promoting and sustaining behavior changeamongstprovidersisneededthroughthedevelopmentanddistributionofspecifichealthmessagesviaavarietyofcommunicationchannels

• Privateprovidersareunderpressuretoprescribecost‐effectivetreatmentsthatareperceivedtoaddresstheimmediatesymptomsofdiarrheatomaintainaloyalpatientbaseinacompetitiveenvironment

The Indian government has investedsignificant resources into buildingpublic health infrastructure, however,shortages inhumanresourceshave ledto inadequately staffed public health

facilities142. The government estimates, based on vacancies insanctionedposts,that18%ofprimaryhealthcentersarewithoutadoctor, 38% are without a laboratory technician and 16% arewithout a pharmacist143. Further, the quality of care in publicsector clinics is reportedlyatrocious; a study inNewDelhi foundthatprovidersspendlessthantwominuteswitheachpatientandasked on average one question before issuing a diagnosis to thepatient. Researchers believe this negligence is due to limitedincentiveswithinthefixedsalarypaystructuretomotivatehigh‐quality care, and an overall lack of employee oversight andmonitoring144.

Asaresult,nearly80%ofoutpatientvisitsand60%ofhospitaladmissions occur in the private sector, leading to high out‐of‐pockethealth spending (71%)and the riskofbeingdriven intopoverty from unexpected health shocks (4% annually)145. This trend alignswith diarrhea treatment care‐seekingbehavior;a2009study ledbyUNICEF foundthat58%ofcaregiverssought treatment fordiarrheafromaprivateprovider146.

142FutureHealthSystems."AParallelHealthCareMarket:RuralMedicalPractitionersinWestBengal,India."June2007143MohanRaoetal.“IndiaTowardsUniversalHealthCoverage5:HumanresourcesforhealthinIndia,”Lancet,2011;377:587‐598144JishnuDas,JeffreyHammer,andKennethLeonard."TheQualityofMedicalAdviceinLow‐IncomeCountries."TheWorldBankDevelopmentResearchGroup,Jan.2008.

Figure 13: Average number of providers available per Indian villager Source: Centre for Policy Research. "Mapping Medical Providers in Rural India: Four Key Trends." February 2011.

Figure 14: Key influencers for RMPs and providers Source: MART. “Formative research for developing communication strategy to private sector diarrhea alleviation through Zinc & ORS therapy (DAZT).” Submitted to AED Arts. 2011

In spite of the financial implications, the growth of the private health sector in India has significantlyincreased the availability and utilization of healthcare services in India. The average rural Indian has 6providers available to them, of which 3.21 are private providers, 0.34 are public providers and 2.31 arecommunity healthworkers (Figure 13). There is variation in these figures across the country; stateswithlowerinfantmortalityrateshavealowernumberofprovidersavailablepervillage147.

However, similar to the public sector, the challenge with the utilization of private health services is thequalityofmedicaladviceandcarereceived.Thereluctanceofqualifiedprivateproviderstopracticeinruralareas, due to lowerpay andpoor living andworking conditions148, has led to the emergenceof a cadreof

unqualified providers called RuralMedicalPractitioners(RMPs).Astudyledby the Center for Policy Researchestimates that 65% of all privateproviders are RMPs, which is more thandouble that of qualified allopathicproviders (25%) and qualified AYUSHproviders (10%) combined149. However,although RMPs have been found toprescribe more drugs and antibioticsmore frequently than qualifiedproviders150, a study conducted in NewDelhi found that the quality of careprovided to diarrhea patients wascomparablebetweenthecadres151.Hence,the poor receive inadequate careirrespective of the sector that healthcareissought.

The following summarizes the keycharacteristicsofeachprivateprovider.

Qualified Allopathic: Allopathic providers complete formal education and earn an MBBS degree beforespecializing into a specific medical field. According to the Indian Medical Council (IMC), there areapproximately640,000152allopathicdoctorspracticing indifferentstatesof thecountry, though, theyareararityinmostruralareas153.AconsultationwithanallopathicproviderwilltypicallycostbetweenUS$1‐$2,depending on the location of the provider154. Qualified provider’s set‐up clinics or work out of a privatehospital in densely populated urban areas where they have the opportunity to charge high consultationfees155. These urban areas usually benefit from uninterrupted supply of pharmaceutical products, offeringtheseprovidersabsoluteaccesstoalltypesofdrugs156.

145MohanRaoetal.“IndiaTowardsUniversalHealthCoverage5:HumanresourcesforhealthinIndia,”Lancet,2011;377:587‐598146UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009147CentreforPolicyResearch."MappingMedicalProvidersinRuralIndia:FourKeyTrends."February2011148RashmiKumaretal."InequityinHealthCareDeliveryinIndia:TheProblemofRuralMedicalPractitioners."HealthCareAnal,2007;15:223‐233149CentreforPolicyResearch."MappingMedicalProvidersinRuralIndia:FourKeyTrends."February2011150RashmiKumaretal."InequityinHealthCareDeliveryinIndia:TheProblemofRuralMedicalPractitioners."HealthCareAnal,2007;15:223‐233151JishnuDas,JeffreyHammer,andKennethLeonard."TheQualityofMedicalAdviceinLow‐IncomeCountries."TheWorldBankDevelopmentResearchGroup,Jan.2008.152WorldHealthOrganization,IndiaCountryOffice.“Notenoughhere…toomanythere:healthworkforceinIndia.”2007.Availableat:http://www.whoindia.org/LinkFiles/Human_Resources_Health_Workforce_in_India_‐_Apr07.pdf153RashmiKumaretal."InequityinHealthCareDeliveryinIndia:TheProblemofRuralMedicalPractitioners."HealthCareAnal,2007;15:223‐233.Note:ThestudyfindsthatinUttarPradesh,only5.6%ofthetotalsamplehadaformalMBBSdegree154InterviewswithPrivateProvidersinUttarPradeshandGujarat,November2011155WHOIndia."NotEnoughHere‐TooManyThere‐HealthWorkforceinIndia."Web.Accessedon:November10,2011.Availableat:http://www.whoindia.org/LinkFiles/Human_Resources_Health_Workforce_in_India_‐_Apr07.pdf156EricLangerandAbhijeetKelkar.“PharmaceuticalDistributioninIndia.”BioPharmInternational,September2008

10%

25% 65%

Private Healthcare Providers in India

Quali"ed Allopathic Provider

Quali"ed AYUSH Provider

Unquali"ed Rural Medical Practitioner (RMP)

Figure 15: Overview of private providers in India Source: Centre for Policy Research. "Mapping Medical Providers in Rural India: Four Key Trends." February 2011

QualifiedAYUSH:AYUSHproviders complete formaleducationprograms targeted specifically toa typeofrecognized alternative medicine. This includes: Ayurveda, Yoga, Unani, Siddha, and Homeopathy. Anestimated 3,371 hospitals and 22,014 public health clinics provide only AYUSH services157.While 754,985AYUSH doctors are registeredwith theDepartment of AYUSH at the GOI, only 200,000 are believed to beactively practicing158. AYUSH providers usually operate in semi‐urban or rural areas and charge amodestconsultation fee.Theseprovidersarenot fullydependenton thepharmaceuticaldistribution system, sincemanyAYUSHmedicinesarehomemadefrommedicinalplantmaterials.

UnqualifiedRMP:RMPshaveno formalmedicaleducationand largelypracticeallopathicmedicineonthebasisofworkexperienceunderaqualifiedprovider159.InmostruralareasinIndia,RMPsarethefirstpointofcontactfortreatment,especiallyforacutediseases.Thisbehaviorisdrivenbyfactorsincludingproximity,availability,affordabilityandperkssuchascreditformedication160.RMPsoperateassmall‐businessowners,building loyal customer bases by offering 24/7 care, empathy and compliance with caregiver requests.Typically,RMPschargecaregiversUSD$0.20forthecostofaconsultation161.SomeRMPsalsodispensedrugs.In the case of diarrhea treatment, a study in four districts in UP found that RMPs charged an averageUSD$1.15 for a consultationand treatment (ORSandzinc)162. Largelydetached from traditional sourcesofhealth information such asMRs and CMEs, RMPs have strong professional linkageswith qualified privateallopathicproviders.Thisisstructuredaseitheraformalarrangement,suchasamentor‐menteerelationshipor an incentivized referral agreement, or informally, by following a qualified private allopathic provider’sprescriptions. The latter is achieved by studying the prescriptions brought by caregivers to consultations,presumablyasasubstitute foramedicalrecord163. This illustratesthecascading impact thatan influentialqualified provider has on the uptake of certain health products across the hierarchy of healthworkers164.Linkages also exist between RMPs and retailers to ensure drugs prescribed are actually available forpurchase.

ThoughthetotalnumberofRMPsacrossIndiaisunknown,onedistrictinAndhraPradeshwasfoundtohavean estimated 3,030 RMPs165, and the USAID/AED Point‐of‐Use Water Disinfection and Zinc Treatment(POUZN)project identified20,000RMPs in10districts inUttarPradesh166.AddressingthisproliferationofRMPshaslargelybeenneglectedatthepolicylevel.ThoughataskforceunderNRHMwasestablishedin2006to examine the accreditation, training and integration of RMPs into the formal health system,recommendationsmade in 2007 by the group have since remained idle167. In certain states, the SupremeCourtofIndiahasfiledpublicinterestlitigationagainstRMPs,however,alackofcapacityinthesystemhasledtoadearthofopenfiles168.Thesesetbacks,however,arenotwithoutsomevalidity,astheissueofRMPsisacontentiousone,sinceacompletebanofthecadrewouldseverelyerodeaccesstohealthcareinruralareas.Recently,theGOIannouncedthatitwasconsideringestablishinganewcadreofnon‐physiciancliniciansthataretrainedinadesignationcalled“BachelorsofRuralHealth”,butpushbackfromthemedicalfraternityandequityissueshavesincehaltedsuchefforts.

ASHAs:TheGOIisawareoftheshortagesintheavailabilityofqualifiedproviders,andtheadditionalcapacityrequired to improve health outcomes. As a result, since the launch of the National Rural Health Mission

157DepartmentofAYUSH,GovernmentofIndia.Web.AccessedonNovember10,2011.Availableat:www.indianmedicine.nic.in158MohanRaoetal.“IndiaTowardsUniversalHealthCoverage5:HumanresourcesforhealthinIndia,”Lancet,2011;377:587‐598159RashmiKumaretal."InequityinHealthCareDeliveryinIndia:TheProblemofRuralMedicalPractitioners."HealthCareAnal,2007;15:223‐233.Note:ThestudyfindsthatinUttarPradesh,only5.6%ofthetotalsamplehadaformalMBBSdegree160Ibid161RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008162Ibid163Interviewswithnon‐profitorganizations,September2011164FormativeResearchForDevelopingCommunicationStrategyToPrivateSector165K.V.Narayana.“Theunqualifiedmedicalpractitioners:methodsofpracticeandnexuswiththequalifieddoctors.”CentreforEconomicandSocialStudies,May2006166POUZNProject.February2010.TreatingChildhoodDiarrheainIndiawithORTandzinc:EngagingthePharmaceuticalIndustryandPrivateProviders.Point‐of‐UseWaterandDisinfectionandzincTreatment(POUZN)Project,AED,Washington,DC.167NationalRuralHealthMission,MinistryofHealthandFamilyWelfare,GovernmentofIndia.“Task‐GroupsetuptoexamineAccreditation,TrainingandIntegrationofPrivateRuralMedicalPractitioners.”April2007.168DavidH.PetersandV.R.Muraleedharan.“RegulatingIndia’sHealthServices:Towhatend?Whatfuture?”SocialScienceandMedicine,2008;66:2133‐2144

(NRHM) in 2005, the availability of female community health workers in the public health sector, called“AccreditedSocialHealthActivists(ASHAs),”hasbeenprioritized.Indianowhas700,000ASHAworkers,whoreceive incentivized compensation formanaging specific health services for blocks of 1,000 people169, andsupplementhealthcaresoughtintheprivatesector.

DiarrheaTreatmentPrescribingBehavior

There is a discrepancy between what providersknow they should do to treat diarrhea and whattheyactuallydo,oftenreferredtoasthe“know‐do”gap. A study led by UNICEF in one district in 10states found that almost 90% of private providersclaimed to prescribe ORS, and 46% stocked theproduct170. Another study in four districts in UttarPradesh found that providers perceived ORSfavorably, agreeingwith statements including: firstline of treatment for diarrhea (89%), available(94%), affordable (94%) and appropriate for anychildwithdiarrhea(88%).Despitetheseclaims,theprescription of ORS reported by caregivers is low,ranging from 19% in a study in 15 districts inBihar171 to 47% in the UNICEF study across 10states172.

169RashmiKumaretal."InequityinHealthCareDeliveryinIndia:TheProblemofRuralMedicalPractitioners."HealthCareAnal,2007;15:223‐233.Note:ThestudyfindsthatinUttarPradesh,only5.6%ofthetotalsamplehadaformalMBBSdegree170UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009171Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011172UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009

Figure 16: Provider knowledge of zinc Source: UNICEF. “Management Practices for Childhood Diarrhea in India.” 2009

Figure 17: Provider diarrhea treatment prescribing practices Source: UNICEF. “Management Practices for Childhood Diarrhea in India.” 2009

Thisknow‐dogapisfoundtoextendtozinc,thoughperceptionsoftheproductarelessfavorable.Inthe10statesincludedintheUNICEFstudy,nearly19%ofprivateprovidersreportedprescribingzincfordiarrhea,but only 1.3% of caregivers reported being prescribed zinc173. In four districts in Uttar Pradesh, a limitednumberoftheproviderssurveyed(n=300)believedthatzincwasthefirstlinetreatmentfordiarrhea(9%),available (17%),andappropriate foranychildwithdiarrhea (16%)174.Further,RMPs interviewed inUttarPradeshandGujaratdidnotbelievethatzincwasanefficacious,immediaterelievingtreatmentfordiarrhea,andperceivedittobemoreexpensivethanantibiotics175.The implication of these findings is two fold: firstly, the gap between knowledge and practice providessufficientevidencethattrainingandeducatingprovidersaloneisnotgoingtosignificantlymovetheneedleontheuptakeofORSandzinc.Secondly,communicatingthebenefitsandclinicalevidenceofzincrequiresamore thoughtful andcompelling communication strategy.Lessons from theUSAIDPOUZNprojectdescribethe need for key opinion leaders to endorse zinc in addition to engaging face‐to‐face with providersrepeatedlytochangeprescribingbehavior176.ThoseproviderswhowerefoundtobeawareofORSandzincinfourdistrictsinUttarPradeshreportedlearningabouttheproductsfrommassmedia(64%),communityhealthworkers(ANM,ANW,ASHA;26%),friends/relatives(22%),governmentprograms(18%)andposters(14%)177.Until these strategies are implemented, combinationsof alternativemedications includingantibiotics, anti‐diarrheals, IV fluids and injections will continue to be prescribed as the primary treatment for diarrhea.Various studies have confirmed this prescribing behavior, though significant variation exists between thetypesoftreatmentsprescribedandwhetheritiscaregiverorproviderreported(Table5).

173UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009174RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008175MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011176POUZNProject.February2010.TreatingChildhoodDiarrheainIndiawithORTandzinc:EngagingthePharmaceuticalIndustryandPrivateProviders.Point‐of‐UseWaterandDisinfectionandzincTreatment(POUZN)Project,AED,Washington,DC.177RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008

This behavior and variation is influenced by a number of factors, which are summarized below in noparticularorder:

Hawthorne effect: Providers surveyed are subject to the “Hawthorne effect178,” which is described asmodifiedbehaviorinresponsetothefactthatoneisbeingstudied.Thisphenomenonmaypartlyexplainthediscrepancybetweenwhatprovidersreportthattheydoorknowthattheyshoulddoandwhattheyactuallydoinregardstodiarrheatreatment.

Caregiver expectations: Provider recommendations are strongly influenced by caregiver expectations,which include immediate relief treatment, and a high number of drugs for a low price. Antibiotics, anti‐diarrheals, injections and others are considered to fulfill this expectation in comparison to ORS, which issometimes perceived as a cheap and ineffective treatment179. Private providers face added pressure torespond to caregiver demands to sustain business operations and a loyal customer base. In fact, RMPs in

178JishnuDas,JeffreyHammer,andKennethLeonard."TheQualityofMedicalAdviceinLow‐IncomeCountries."TheWorldBankDevelopmentResearchGroup,Jan.2008.179MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011

UNICEF Study1

10 states; 1 district Caregivers reported

N=9,298 % of mothers who used

treatment(s) x to treat their child’s diarrhea episode of all mothers surveyed that sought outside treatment for their

child’s diarrhea episode in the last two weeks

Baseline Survey2

Bihar; 15 districts Caregiver reported

N=437 % of mothers who used

treatment(s) x to treat their child’s diarrhea episode of all mothers surveyed that had a child with diarrhea in the in

last two weeks

UNICEF Study3

10 states; 1 district Provider reported

N=485 % of private providers that

reported prescribing treatment(s) x of all private providers surveyed (includes private allopathic, unqualified health practitioner, AYUSH

private, and private chemists)

UNICEF Study4

Uttar Pradesh; 4 districts Provider reported

N=192 % of providers and retailers that

used treatment x for the last diarrhea episode treated of all

providers and retailers surveyed (from the public and private sector)

Antibiotics 5.6 12.8 52 66

Anti-diarrheal 18.2 11.9 42 17

IV Fluids 1.1 0.69 24 2

Injections 23 19 26 31.8

Tonics 31.5 N/A 25 N/A

ORS 47 19.7 89 85

Zinc 1.3 3 18.6 23.4*

Others N/A 64.3 N/A 49.5**

Table 5: Overview of treatments prescribed for diarrhea as reported by caregivers and providers in various studies. 1UNICEF. “Management Practices for Childhood Diarrhea in India,” 2009; 2 Dr. Christa L. Fischer Walker, and Dr. Sunita Taneja. "Reducing deaths from Diarrhea in the Indian State of Bihar.” Funded by Children’s Investment Fund Foundation, 2011; 3 UNICEF. “Management Practices for Childhood Diarrhea in India.” 2009; 4Rural Research Institute (SRI). "Market Survey on Market Availability and Uptake of ORS and Zinc for Diarrhoea Management." 2009 *Includes Zinc and Zinc with Multivitamin **Includes homemade fluids and AYUSH pills and syrups

UttarPradeshandGujaratreportedthatcaregiversthreatenedtoconsultotherprovidersifantibioticswerenotprescribed180.

Providerknowledgeandbelief:Aspreviouslymentioned,awarenessandbeliefintheappropriatediarrheatreatment(ORSandzinc)islowamongstproviders,especiallythoseintheprivatesector.RMPsinterviewedinUttarPradeshandGujaratreportedthatsincecaregiversoftensoughtdiarrheatreatmentatstage2or3oftheepisode,theyfeltobligedtoprescribeantibioticsorananti‐diarrheal181;thesetreatmentsareconsideredtobehighlyefficaciousfordiarrheatreatmentsincetheyprovidequickrelief.

Market dynamics: The perception of a treatment’s availability, cost and profitability is factored into aprovider’sprescribingdecision.Forinstance,providersmayadvisecaregiverstomakesugar‐salt‐solutionathome, and only purchase antibiotics or an antidiarrheal to save money182. Liaising with retailers is alsocommontoensurethatprovidersprescribedrugsthatareactuallyavailable183.

180Ibid181MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011182Ibid183Interviewswithnon‐profitorganizations,September2011

CaregiverBehavior

KeyBarriers• Caregiversdonotperceivediarrheaasalife‐threateningdisease.Approximately25%ofcaregiversdo

notseektreatmentfordiarrheaorrelyonhomeremedies184• Caregiverspreferantibiotics,anti‐diarrhealsandtonicsfordiarrheatreatmentbecausea)theyare

perceivedtoprovidequickandimmediaterelief,b)thenumberofdrugsareoftenequatedwiththerelativeefficacyofthetreatmentc)theyareeasilyavailableandmoreaffordablethenORSandzinccombined

• ORSisnotconsideredtobeaneffectivediarrheatreatmentbycaregivers.Though70%ofcaregiverswerefoundtobeawareofORS,only35%useditfordiarrheatreatment185

• Awarenessofzincasatherecommendedtreatmentfordiarrheaamongstcaregiversisnil186

Antibiotics, anti‐diarrheals, injections and tonicsare the most common treatments used fordiarrhea in India. Between 70‐90% of caregiverssurveyed in select districts in Uttar Pradesh187,Bihar188andGujarat189reportedusingatleastoneoftheseproductstotreatchildhooddiarrhea.Thispales in comparison to ORS and zinc, whichtogether isusedby less than1%of caregivers190.Studies have shown that 58% of caregivers seektreatment from the private sector, which isapproximately 3.5 times more than the publicsector (16%)191. Nearly 26% of caregivers treatchildhood diarrhea with home remedies ornothingatall192.

DiarrheaTreatmentKnowledge,AttitudesandPerceptionsThere are a number of reasons that account for poor caregiver uptake of ORS and zinc in India. First,caregiversdonotperceivediarrhea tobea life‐threateningdisease, andgenerally takea “wait andwatch”attitude towards seeking treatment. As a result, caregivers seek treatment for diarrhea 1‐2 days after theonset of symptoms orwhen the symptoms appear severe193. A survey led by international NGOs in Uttar

184UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009185Ibid186Ibid187Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011188Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011189Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecross

sectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011190UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009191Ibid192Ibid193MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011

Figure 18: Caregiver diarrhea treatment health source Source: UNICEF. “Management Practices for Childhood Diarrhea in India.” 2009

PradeshandGujaratfoundthatover70%ofcaregiversonlyseektreatmentfordiarrheaifthechilddevelopsfeverorvomitsconstantly194.

Accordingtoareportreleasedbyamarketresearchfirmon diarrhea treatment practices in Uttar Pradesh andGujarat,caregiverswilltypicallytreatchildrenwithhomeremediesonday1andday2ofadiarrheaepisode,sincethedisease is considered tobe short and easily curable.These home remedies, which are usually passed on tocaregiversbymothers,motherinlaws,grandmothersandneighbors,includesugar‐salt‐lemonorsugar‐saltsolutionand other state‐specific mixtures. For instance, in UP,fennel seeds boiled in water, onion juice and a roastedmixture of asfoetida, carom seed, and myrobalans (e.g.amlafruit)aregiventochildrenduringthefirsttwodaysofthediarrheaepisode,whereas,inGujarat,theusageofcommercially packaged ORS as a home remedy is high.By day 3, if the frequency of stools has not subsided,caregiverswillseektreatmentfromanRMP.Ininstanceswherethediarrheasymptomspersistuntilday5andday6,aqualifiedproviderwillbeconsulted195.Whenoutsidetreatment issoughtbyacaregiver,provider(unqualifiedorqualified)recommendationsareofteninfluencedbyhis

or his perception of caregiver expectations. However, caregivers report that they heed to providerrecommendations.Thiscommunicationgapcontributestoaperpetuatingcycleofincorrectperceptionsandprescriptions for diarrhea treatment. In some cases, however, caregivers demand antibiotics or anti‐diarrhealsfromproviders,threateningtootherwiseseektreatmentelsewhere196.Second, caregivers do not value the benefits of ORS for diarrhea treatment, in comparison to antibiotics,injections, anti‐diarrheals and tonics,which areperceived tooffer “immediate relief treatment.”One studyfoundthatcaregiversperceivedORStobeequivalenttohomeremediesorglucoseandnotamedicine197;thismaybetheresultofyearsofgovernment‐ledsocialmarketingwhichpromotedtheuseof“homesolutionsorORS” for diarrhea treatment. As a result, a gapbetweenORSknowledge (70%) andusage (38%) amongstcaregiversremains.However,althoughcaregiverknowledgeofORSishigh,studiesinUttarPradesh,GujaratandBihar found thatcaregivers lackanunderstandingof the linkbetweenORSandrehydration, reportingthatthedrugshouldbeusedfordiarrheaandvomiting198,199. Insomecases,thisknowledgegapextendstoORSpreparation;astudyinKashmirfoundthatonlyapproximately18%ofmothersknewhowtocorrectlyprepareORS200.Third, awareness of zinc amongst caregivers is low. Studies have shown that only between 1201‐10%202 ofcaregiversareawareoftheuseofzincfordiarrheatreatment.Othercaregiversbelievedzincwasusedasa

194Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011195MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011196Interviewswithnon‐profitorganizations,September2011197MART.“FormativeresearchfordevelopingcommunicationstrategytoprivatesectordiarrheaalleviationthroughZinc&ORStherapy(DAZT).”SubmittedtoAEDArts.2011198Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011199Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011200 Renata Seidel. “Behavior Change Perspectives and Communication Guidelines on Six Child Survival Interventions: Chapter 4 ‐DiarrhealDiseases.” JointpublicationoftheJohnHopkinsSchoolofPublicHealth,CenterforCommunicationPrograms,andAEDwithsupportfromUNICEF.December2005201UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009

Day 1-2

• Home Remedies • Self Medication • No Treatment

Day 3-4 • Consult Rural Medical Practitioner

Day 4-5

• Consult Quali"ed General Practitioner or AYUSH

Figure 19: Overview of caregiver diarrhea treatment seeking behavior Source: MART. “Formative research for developing communication strategy to private sector diarrhea alleviation through Zinc & ORS therapy (DAZT).” Submitted to AED Arts, 2011

fertilizer(52%),tonic(5%)orforacough(3%).InBihar,75%ofcaregiversthathadheardofzincreportedlearning about thedrug frommassmedia andprivate providers203,whereas inUttar Pradesh andGujarat,private providers and private hospitalswere themore common information source (87%)204. In contrast,onlybetween5‐23%ofcaregiversinallthreestateslearnedaboutzincthroughapublicprovider(i.e.PHC,ANM,AWW,AWC,ASHA).

Lastly, the affordability of ORS and zinc may impact caregiver uptake of the products; the mean cost oftreatmentwithaconsultationcanvarybetweenUS$1.40and$2.60(Figure20).Incomparison,themeancostof treating diarrhea with a three‐day course of Ofloxacin‐Ornidazole ranges from US$0.77 to $1.97. ThisanalysisillustratestheopportunitytoreducetheoverallcostofatreatmentcourseofORSandzincthroughvarioussupplystrategiestoachieveamorecompetitiveandaffordablepricepointforcaregivers.

202Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011203Ibid204Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011

Quali"ed Provider Consulation w/ ORS/zinc

treatment

Quali"ed Provider Consulation w/

antibiotics treatment

Quali"ed Provider Consultation w/ antibiotics/ORS

treatment

Unquali"ed Provider Consultation w/ ORS/zinc

treatment

Unquali"ed Provider Consultation w/

antibiotics treatment

Unquali"ed Provider Consulation w/ antibiotics/ORS

treatment

High $3.35 $2.66 $3.36 $1.75 $1.06 $1.76

Low $1.85 $1.27 $1.67 $1.05 $0.47 $0.87

Mean $2.60 $1.97 $2.52 $1.40 $0.77 $1.32

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Diarrhea Treatment Cost Analysis

Figure 20: Diarrhea treatment cost analysis Sources: 1) Retail price of two 20g ORS sachets US$0.20-$0.35; AED. “ORS Producers Matrix.” Updated September 16, 2011 2) Retail price of 10 tablets of 20mg Zinc Sulfate US$0.45 – $0.65; AED. “Zinc Producers Matrix.” Updated September 16, 2011 3) Retail price of three tablets of antibiotic, Ofloxacin-Ornidazole, US$0.27-$0.66; http://www.mims.com/India 4) Cost of consultation with qualified provider US$1.00 - $2.00; Cost of consultation with unqualified provider US$0.20 - $0.40; Interviews with Private Providers in Uttar Pradesh, Gujarat, New Delhi, November 2011

Lowest cost option

RetailerBehavior

KeyBarriers

• Lowawarenessandknowledgeofthecorrecttreatmentfordiarrheaamongstretailers• MisalignedincentivesforretailerstostockandpromoteORSandzincincomparisontoalternative

treatments• Overlapbetweenprovidersandretailersintermsofprescribinganddispensingdiarrheatreatment• Saleofprescriptiondrugs,withoutaprescription,tofosterconsumerpatronageThere are approximately 550,000 pharmacies in India, of which approximately 75% of them operateindependentcommunity,hospitalandgovernmentpractices205.AlthoughtheWHOhasrecognizedtheroleof

pharmacists as a key provider of primaryhealthcare,healthandpharmaceuticalreformpoliciesinIndiahavehistoricallynotincludedthem due to the lack of clarity about apharmacist’s role beyond the supply anddistribution of drugs206. Though pharmacistsare required to complete a diploma inpharmacy (D. Pharm), which is a 2‐yearprogram after high school and includes 3months of practical training in a hospitalpharmacy, to apply for a pharmacy license,thisregulationisnotactivelyenforced207.Asaresult,themajorityofpharmaciesinIndiaarenot operated by a qualified pharmacist,especially in rural areas. A study led byUNICEF in Uttar Pradesh found that 76% ofpharmacists interviewed (n=223) did nothave any medical qualifications and about22%ofthesampledidnothaveanypracticaltraining.However,thesamestudyfoundthat

nearly 80% of pharmacists reported obtaining training from alternative sources as opposed to formaleducation,includingfrompracticingphysicians(35%),bytrainingasacompounder(22%)orcompletingthetrainingcourseforANWs(11%)208.ResearchconductedinMumbaifoundthatwhilemostpharmacyownershadtheappropriatemedicalqualificationtheydidnotmanageday‐to‐dayoperationsofthepharmacy.About99% of caregivers surveyed were assisted by a clerk, of which only 41% had the appropriate medicalqualificationstooperatethepharmacy209.

ThespreadofpharmaciesinIndiaisskewedtourbanareas,sincepharmacistsarereluctanttoworkinruralareas,citinglowprofitsandunreliabledrugdistributionasbarrierstobusinesssustainability210.However,inboth geographies, the pharmacist plays a critical role in the diagnosis and treatment of diseases, oftenblurringthelinesbetweentheroleofprovidersandretailers.AstudyconductedbyUNICEFinUttarPradeshdefined qualified retailers as anyone that dispensed drugs, which included pharmacists, in addition to

205SouthEastAsianFIP‐WHOForumofPharmaceuticalAssociationsincollaborationwithWHO‐IndiaCountryOffice.“ChallengesandOpportunitiesforPharmacistsinHealthCareinIndia.”November2007206Ibid207Ibid

208RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008209KamatVRandNichterM.“Pharmacies,self‐medicationandpharmaceuticalmarketinginBombay,India,”SocSciMed1998;47(6):

779‐794210SouthEastAsianFIP‐WHOForumofPharmaceuticalAssociationsincollaborationwithWHO‐IndiaCountryOffice.“ChallengesandOpportunitiesforPharmacistsinHealthCareinIndia.”November2007

Medical Quali"cations

24%

No Medical Quali"cations

76%

Retailer Medical Quali"cations (Uttar Pradesh)

Figure 21: Overview of retailer medical qualifications Source: Rural Research Institute (SRI). "Market Survey on Market Availability and Uptake of ORS and Zinc for Diarrhoea Management." 2008

qualifiedprivateproviders,RMPs,ANMsandANWsamongstothers211.InanothersmallstudyintwovillagesofonedistrictinUttarPradesh,researchersfoundthat43%ofcaregiversdirectlyconsultedapharmacistforhealth advice212; similarly, in 15 districts in Bihar, 17% of caregivers perceived pharmacists to be anappropriatesourceofcarefordiarrhea213.However,itcanbeassumedthatthisbehaviorvariesfromstatetostate depending on the distribution of pharmacists, RMPs, qualified providers etc.; an alternative study inselectdistricts inGujaratandUttarPradeshoncaregiverdiarrhea treatmentseekingbehavior,didnotcite

pharmacists as an appropriatesourceofcare214.

The combination of minimaleducation with the provision ofdrug prescription and dispensinghas contributed to theinappropriate treatment ofdiarrheaattheretaillevel.Similarto providers, a “know‐do” gapexists. UNICEF’s study across onedistrict in 10 states found thatnearly 88% of retailers reportedrecommending ORS and 11%reported recommending zinc fordiarrhea treatment, while only47% and less than 2% ofcaregivers in the same studyreportedreceivingORSandzinc.

In contrast, approximately 40% of retailers believed that antibiotics were the appropriate treatment fordiarrhea215. A study in Uttar Pradesh found that retailers prescribed ORS (85%), antibiotics (78%) andinjectionantibiotics(28%)mostoftentothemostrecentdiarrheapatients216.

InterviewswithretailersinNewDelhiandLucknow,UttarPradeshrevealedthatretailerstockingdecisionsareprimarilydrivenbyperceived consumerdemand, thoughprofitpotential and confirmationofproviderprescribingcanalso influencestockingdecisions217.Accordingto thesurveyconductedbymarketresearchfirm, IMRB, inUttarPradesh,50%of retailershaveeithernever stockedORSordidnothaveany in stockduring the survey period; 88% of the same retailers surveyed reported to have never stocked zinc. LowconsumerdemandandawarenessofORSwere theprimaryreasons fornotstockingORS;15%of retailersreportedbeingdissatisfiedwith the lowprofitmarginof theproduct.Retailersseldomstockedzincdue tolimitedawarenessoftheproduct.However,thestudyalsofoundthatabout74%ofretailerswerepreparedtostockORSandabout70%retailerswerepreparedtostockzinciftheproductsweresuppliedtothemattheirshopandothersupplychainbottleneckswereaddressed.OfthoseretailersthatdidstockORS,majorityprocuredtheproductfromwholesalers(50%),largepharmacies(27%),salesmen(7%)ordistributors(3%)eitheronceortwiceamonth(80%)218.

211RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008212Ibid213Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011214Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011215UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009216RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008217Interviewswithretailers,October2011218RuralResearchInstitute(SRI)."MarketSurveyonMarketAvailabilityandUptakeofORSandZincforDiarrhoeaManagement."2008

Figure 22: Retailer diarrhea treatment stocking patterns Source: Rural Research Institute (SRI). "Market Survey on Market Availability and Uptake of ORS and Zinc for Diarrhoea Management." 2008

49.4

12.6

38

7.7 5

87.3

0 10 20 30 40 50 60 70 80 90

100

Currently stocking Currently not stocking Never stocked

Retailer Diarrhea Treatment Stocking Patterns

ORS

Zinc

Thoughprofitmarginsarenottheprimarydriverforretailerstockingandprescribingdecisions,theydoplaya role in thedecision‐makingalgorithm, sincepharmaciesoperate in extremely competitive environments.Mostpharmaciesarelocatedincloseproximitytoeachother,clutteredespeciallynearhospitalsandproviderclinics.Insomecases,thisintensifiedcompetitioninfluencesunethicalbusinesspractices,includingthesaleofprescriptiondrugswithoutprescriptions(includingantibioticsandanti‐diarrhealsfordiarrheatreatment),undercuttingcompetitors,offeringdiscounts,sellingexpiredgoodsandcompanysamplesandrecommendingunnecessary drugs219. A study conducted by the University of Arizona and Emory University on drugdispensing behavior of pharmacists in India found that 66% of all drugs purchased were without aprescription,ofwhich27%wereantibiotics.Thestudyalsohighlightedthatmorethan50%ofprescriptiononlyanti‐diarrhealswerepurchasedwithoutaprescriptiondirectlyfromapharmacy220.

219SouthEastAsianFIP‐WHOForumofPharmaceuticalAssociationsincollaborationwithWHO‐IndiaCountryOffice.“ChallengesandOpportunitiesforPharmacistsinHealthCareinIndia.”November2007220KamatVRandNichterM.“Pharmacies,self‐medicationandpharmaceuticalmarketinginBombay,India,”SocSciMed1998;47(6):779‐794

SupplysidebarrierstoORS/zincuptake

LimitedinvestmentinmarketingofORSandzinc

Fewpharmaceuticalmanufacturers investadequateresourcestocommerciallymarketORSandzinc,whicharebothlow‐volume,low‐marginproducts.Inmanycases,ORSandzincarenotconsideredaprioritywithina largemanufacturer’sproductportfolio,which is increasingly focusedondrugs for lifestylediseases.Asaresult, perceptions of ORS as an effective treatment for diarrhea are weak, and awareness of zinc is low.ThosemanufacturersthatdoinvestresourcesintomarketingORSandzincduringthediarrheaseasonoftenreduceprofitmarginstocompensateforthehighmassmediacosts.Inthecaseofzinc,marketingislimitedtoproviders,sincethecurrentdrugstatusoftheproductrestrictsdirecttoconsumermarketing.Manufacturersinterviewed believed that executing a large‐scale national awareness campaign sponsored by the GOI andchangingzinc’sregulatorystatustoOTCcouldimpacttheuptakeoftheproducts.

IrregularsupplyofORS/zinctoruralareas

DrugdistributionislimitedtoClassIandClassIItowns(>100,000people),sincetheyofferamarketthatwillclearlyprovidea returnon investment.Beyond thispoint, drugdistribution isdemand led, and conductedthrough informal relationships forged between large retailers in a block or district with stockists or sub‐stockistswhocanofferproductsoncredit.Largeretailersthensubsequentlysupplyproducttootherretailersin theblockordistrict.Asaresult, consistentavailabilityof lowdemandproductssuchasORSandzinc incomparison to high demandproducts such as antibiotics and anti‐diarrheals is low in rural areas. Thoughpharmaceuticalmanufacturersrecognizetheopportunityofruralmarkets,thoseinterviewedweregenerallyreluctant to invest the initial capital required to expand distribution. In some cases, manufacturers havepartneredwithnon‐profitorganizationsand/orfast‐movingconsumerproductgood(FMCG)companiesthatreachruralareastodistributepublichealthproducts,includingORSandzinc.

DemandsidebarrierstoORS/zincuptake

CaregiverspreferalternativetreatmentstoORS/zincfordiarrhea

CaregiversdonotperceiveORStobeaneffectivetreatment fordiarrhea incomparisontoantibiotics,anti‐diarrheals and tonics. Though awareness of ORS is high (55%‐88%), usage is low (15‐38%)221,222,223. This“know‐do” gap is driven by four key factors. First, ORS is not believed to provide “immediate relief” fromdiarrhea symptoms in comparison to alternative treatments – an outcome that is highly valued for poorfamilieswithdemandingworklifestyles.Second,ORSisconsideredsynonymouswithhomeremediessuchassugar and salt solution, reducing the willingness to pay for the product. Third, the purpose of ORS andconceptofrehydrationismisunderstood.Lastly,latentdemandforORSislostsinceprovidersreportbasingprescribingdecisionsonperceptionsof caregiverpreferences,while caregivers reportheeding toproviderrecommendations. Zinc, on theotherhand, suffers from lowawareness amongst caregivers andRMPsandlow confidence in the efficacy of the product amongst qualified providers. Due to limited marketing andpromotion of zinc, the introduction of the new product for diarrhea treatment has not been able to shiftcurrentmarketdynamicsfromantibiotics,anti‐diarrhealsandtonics.RepositioningORSandzincthroughtheintroductionofaco‐packageproductandahigh‐impactbrandingcampaign,withthesupportofpublicand

221Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."ReducingdeathsfromDiarrheaintheIndianStateofBihar.”FundedbyChildren’sInvestmentFundFoundation,2011222Dr.ChristaL.FischerWalkerandDr.SunitaTaneja."EnhancingtheUptakeofORSandZincinTargetedAreasofIndia:Baselinecrosssectionalsurveyinternalreport.”FundedbyChildren’sInvestmentFundFoundation,2011223UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009

private stakeholders, including theGOI,mayhelp shift provider and caregiverperceptionsof theproductsandsubsequentlyincreaseuptake.

Caregiversdonotperceivediarrheatobelifethreatening

Caregiversdonotconsiderdiarrheatobelifethreatening,ratherbelievingthatthediseaseisa“factoflife”that can be managed at home. Approximately 26% of all caregivers do not seek outside treatment fordiarrhea,ofwhich50%donotadministeranytreatmentatall224. Ingeneral,caregivers takeacasual“waitandwatch”attitudetodiarrhea,offeringhomeremediesonday1‐2andonlyvisitingaprovideronday3ifsymptomsdonotsubside.Inpartduetothisdelayedtreatmentseekingbehavior,providersfeelpressuredtoprescribe alternative treatments including antibiotics, anti‐diarrheals and tonics to address the immediatesymptomsofdiarrheaand“stopthestools”,orrisklosingaconsumertoanotherprovider.

Conclusion

This assessment provides an overview of the currentmarket dynamics governing the diarrhea treatmentmarket in India and offers insights into the factors hindering wide‐scale uptake of ORS and zinc in thecountry.Onthesupplyside, theperceptionofORSandzincas low‐volume, lowmarginproductscombinedwith internal competing priorities has limited investment in the marketing and expanded distribution oftheseproducts.Onthedemandside,poorperceptionandvalueforthecomparativebenefitsofORSandlowawareness of zinc, has led to a preference for alternative diarrhea treatments such as antibiotics, anti‐diarrhealsandtonics,interruptinganydemand‐sidepulltoreshapethemarket.As seen from the factors influencing the current market failure, the desired shift to ORS and zinc as theprimary diarrhea treatments will require a coordinated effort amongst stakeholders across sectors tomitigateprivate sector risks for the achievementof public sector objectives.Notably, this includes loopingRMPs, the most common source of diarrhea treatment in India, into the flow of health information andengagementthatextendsbeyonddidacticaltrainingtoinfluencechangesinprescribingbehavior.Inaddition,repositioningORSandzincthroughinnovativemarketingtacticsthatdrawonkeybehaviorchangeinsightswill support redefining themost appropriate treatment for diarrhea in the country. Thismay include theintroductionofaco‐packageproductofORSandzincthatcandirectlycompetewithalternativetreatmentsonpriceandprofitability.WhilethepublicsectorhasaroleincreatingawarenessandestablishingcredibilityforORSandzincastheprimary treatment fordiarrhea, thisassessment reinforces thecentralityandgreatpotentialof theprivatesector, aswellas thechallengeswithin thismarket thatneed tobeaddressed toachievenationaldiarrheatreatmenttargets.

224UNICEF.“ManagementPracticesforChildhoodDiarrheainIndia.”2009

the private sector market for diarrhea treatment …...internal priorities between higher and lower...

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