Eurasia Group’s Aditya Bhattacharji tackles three more key geopolitical issues that global pharma needs to be cognizant of: the world’s leading drug regulators becoming increasingly strident and active beyond national borders; the impact that greater awareness and work on climate change could have on the industry; and the risks surrounding new health regulation in India.
Regulators stepping up in a G-Zero world
In previous pieces, we have addressed a growing trend within the pharmaceutical space toward regulatory harmonization, particularly as emerging markets use developed market frameworks as a benchmark for balancing innovation and safety. In a related emerging trend, we are seeing less prominent regulators staking out a more visible role globally. France’s regulator, the ANSM, aims to play a larger role in EU-level decisions. That function might become increasingly important due to the UK’s declining regulatory capacity, as well as the EU’s falling attractiveness for new product launches (for example, due to longer approval timelines) relative to markets like the US and Japan. Japan’s healthcare officials and industry members also appear to be taking a more assertive and outward-looking tack. The leadership of Japan’s Pharmaceuticals and Medical Devices Agency is interested in raising pharmacovigilance standards across the Asia Pacific and is investing in new training centers and protocols to that end.
One possible driver is the fact that some of the largest markets are mired in domestic politics that constrain the resources, focus, and even reputational heft of their regulators—the US Food and Drug Administration and the UK’s Medicines and Healthcare products Regulatory Agency being prime examples.
More attention to climate change might create upside for global health
Political attention to climate change is increasing, despite limited attendance at this year’s annual Conference of the Parties (COP) session. The EU is likely to announce a commitment to zero carbon by 2050, China is preparing to dramatically reduce its domestic emissions, and perhaps most surprisingly, stakeholders in the financial system (eg, central bankers, the IMF) are engaging in fiscal initiatives to address the issue. In November, the WHO and World Meteorological Organization released a report that found the closing decade has been the warmest on record, and that of the 100 countries surveyed for preparedness to the health effects of climate change, only half have a mitigation strategy and only five are spending enough to implement their plans. In an environment where global health engagement continues to be lacklustre from a rhetorical and financial perspective, there is a chance that growing interest in climate change will have positive knock-on effects for these highly interconnected global challenges.
India’s health policy becoming more dynamic, but with new risks for pharma
Health policy in India continues to gain momentum. Based on the largely successful rollout of Prime Minister Narendra Modi’s flagship Ayushman Bharat insurance scheme for India’s needy, the government is reportedly cultivating a follow-on program for the country’s vast “missing middle”. The scheme is being designed by the government’s think tank, Niti Aayog, in concert with the Bill and Melinda Gates Foundation, with a similar focus on consolidating India’s multiple public insurance schemes to achieve scale. Successful implementation would bring India ever closer to its goal of realizing universal health coverage, but for drug makers, could also signal greater pricing pressures under consolidated government purchasing schemes.
One additional source of risk for pharma is the government’s increased focus on the medical device sector, which has historically played second fiddle to pharmaceuticals. Officials are discussing creating a separate regulator, devoting additional time to addressing India’s reliance on imported technology, and promoting the development of the digital National Health Stack. Given that India’s public healthcare ecosystem is already stretched thin, these new initiatives could hamper progress on pharmaceutical issues.