India is going to have a bigger role in global generics business due to its low cost and inherent chemistry skills and more so after the country decided to comply with product patent regime.
The bullish mood is quite evident as top executives from global generic companies like Ivax, Mayne Pharma, Pliva, Watson Pharma, Actavis, and Abrika Pharma assembled in Mumbai last week to participate in a two day conference to explain how Indian companies could form perfect symbiotic partners for global generics companies. The conference organised by ABN Amro Bank was titled "The Emerging Role of Indian Pharma."
During the last couple of years, global generics companies including Teva, Pliva, Ivax, Watson, Apotex, Mayne Pharma, Actavis and Abrika pharma have tied up with a selected group of Indian partners to outsource a wide range of generics and bulk drugs. Some of these companies are Cipla, Hikal, Ranbaxy, Orchid and Dr Reddy's Labs.
"We have signed outsourcing contracts with few Indian companies in the recent past. We have a good partnership with Cipla. We are also looking towards acquisition of Indian facilities. Ivax is quite bullish on the Indian market," said Frank Condella, president, European region, Ivax.
According to Robert Wessman, CEO, Actavis, "Indian companies' strength lies in the pipeline of products, the capacities which they offer and above all the cost friendliness of Indian economy."
India's proficiency also lies in the ability to penetrate into manufacturing of niche products, said, Dr Anand Burman, chairman, Dabur Pharma. "Key strategy of some of the companies like Dabur lies in entering niche areas, which offers low competition and at the same time throws open large margins. Oncology and CVS are some of the examples," he said.
According to an ABN Amro study, some favourable factors for Indian companies in the area of outsourcing include low costs, high chemistry skills, low sales base of Indian companies in the US and Europe compared to global generic companies, $45 bn worth drugs going off-patent over the next four years, opening up of the European market, increasing usage of generics across the globe, large base of US FDA approved plants in India, and good NDDS and specialty products capabilities of Indian companies.
From just 18 per cent of the total prescription in 1984, generics market share of new prescriptions in US has risen to 47 per cent in 2003, as per the IMS Health report.
On the other hand, some of the concerns for Indian companies include pricing pressure, few blockbuster drugs going off patent, issue of authorised generics, increasing R&D, sales & marketing, and legal expenses, all of which resulting into increased margin pressures for Indian generic firms.