Pharmabiz
 

Indian Pharma–the journey so far and the way forward

Dr. Gopakumar G. NairThursday, November 27, 2014, 08:00 Hrs  [IST]

Nurtured by the government and well-wishers in the hierarchy thereof, through various industry-friendly policies, the Indian pharma industry commenced its journey of growth in the early seventies.  The governments “investments” of directional policies and pragmatic initiatives were responded in good measure by the pharma entrepreneurs.  A few good decisions in right time, helped the blossoming of Indian pharma.  A few of them are discussed herewith.

The birth of the Indian API (Active Pharmaceutical Ingredient also called bulk drugs) could virtually be dated to 1962 when the IDPL (Indian Drugs & Pharmaceuticals Ltd.) was founded with Russian (then USSR) collaboration.  However, the consecutive Chinese aggression and the wars with Pakistan paralyzed the economy for some time, thereafter.  The real growth of the Indian Pharma as well as IDPL commenced after the (Indian) Patents Act, 1970 was amended to exclude product patenting in the fields of drugs, foods and chemicals.

In the late 60’s , the proposed patent amendment bill was referred to a parliamentary select committee headed by Dr. Susheela Nayyar, wherein Atal Bihari Vajpai,  C. Achutha Menon and stalwarts like them were members.  The IDMA (Indian Drug Manufacturers’ Association) who had spearheaded the amendment proposals were called in for giving views and answering queries.  During the proceedings, the committee was told about the poor state of Indian Pharma R&D and why we could not afford to develop new NCEs and make new drug discoveries.

 IDMA along with others were seeking the removal of product patent regime for pharmaceuticals from Indian Patents Act.  Out of the blue came the question from C. Achutha Menon.  “Mr.Nair, if the Indian Pharma R&D is in so bad state, how many years do you think the Indian pharma industry will take to develop a world class pharma R&D”.  G.P. Nair, who had no R&D experience (neither did his pharma company) was helped by Dr. Abraham Patani to answer.  Nair responded that it will take at least 25 years.  The amendment Bill was passed in Parliament thereafter.

The Indian Patent Act got amended in 1970/1972.  Indian pharma industry got more than 25 years free from product patent regime.  The early handholding by the government helped Indian generic pharma industry to learn the “rope tricks” of reverse engineering fast enough and made strong strides of progress both in API and formulations.  

Though 1972 Drug Policy and Price Control Order, can be termed to be the first one, this was limited only to five drugs which were widely used, such as ferrous sulphate tablets, aspirin tablets, atropine sulphate and the like.  Almost coinciding with the amendments of the Patents Act, 1970, these five formulations were also denied use of trademarks.  These were declared as eligible for sale only in their generic (INN) names.  Taking advantage of the absence of product patent regime a few “entrepreneurial” pharma companies came out with branded generics.

Foremost among them was Ranbaxy’s “Calmpose” which was the Indian branded generic Diazepam, which was equivalent to Roche’s Valium.  INGA (then known as Indo-German Alkaloids) had started large scale cultivation of Ergot in Kashmir and launched “MIGRANIL” for migraine.  Large scale “caffeine” manufacturers (for captive consumption) was also encouraged by INGA (Dr. Patani) with support from Kerala’s Tea waste.  These brands became household names ever after.

There were other brands such as Ampilin (Lyka), Metacin (later the market share was taken over by CROCIN) of Themis, Metagyl (Metronidazole brand of Unique-now JB Chemicals, who had a long drawn out trade mark war with May & Baker – Flagyl).  The mother of all IP (IP was Industrial Property, the current term of Intellectual Property was born with the Uruguay Round of GATT in 1986) or trade mark battles was fought by CIPLA for its Asthalin brand of Salbutamol against Glaxo’s Ventolin including on the design of the inhaler device.

Cipla was a pioneer, alongwith IDPL, in bulk drug manufacturing.  Diazepam, API, was first manufactured in India with indigenous technology, made available by Dr. A.V. Rama Rao, young scientist from NCL (National Chemical Laboratory, Pune) to CIPLA and Centaur.  Alta Laboratories pioneered the production of Aspirin in India to almost self-sufficiency.  Lupin emerged as the leader in Ethambutol & Rifampicin.  Calyx pioneered Pyrazinamide. Duphar (now DIL & FBL) retained leadership in Vitamin D3.  On the excipient front Enar Chemie was a leader in Dicalcium Phosphate.

Under the industrial policy, reservation of licensing strictly to small scale sector, resulted in proliferation of small bulk drug manufacturers such as for Paracetamol, Citrate salts etc.  While the licensing (with quantity restrictions) and reservations for SSI sector helped in proliferation of API manufacturers in India in the seventies and eighties, the same policy acted negatively and in a retrograde way, preventing large API manufacturing units in many key drug raw materials (unlike in China who set up units with massive capacities).

While technically qualified Indian small scale entrepreneurs were coming forward for API manufacturing, the larger companies, especially the multinationals were taking no interest in Bulk drug production.  A few large MNCs had already moved out of India (BMS – Bristol-Myers Squibb, AHP-American Home Products, Ciba Geigy, Roche) (they  came back soon thereafter) in protest against the Patents Act amendment in 1970/72.

The leading MNCs in India in the seventies such Glaxo, Pfizer, Hoechst, May & Baker, Parke-Davis, Abbott were all engaged only in lucrative branded formulations.  API production in India was not picking up inspite of governments prodding, except by IDPL, who were predominantly manufacturing a host of Sulpha Drugs such as Sulphadimidine, Sulphaganidine, Sulphanilamide, Sulphathiazole, Sulphadiazine and Analgin.

If I were asked to answer in not more than three words to a question about the most significant event in the history of Indian Pharma industry (next to Patents Act, 1970), I will unhesitatingly answer “HATHI COMMITTEE REPORT”.  The younger generation of well-wishers of Indian pharma industry both from civil servants and civil society, need to learn a few lessons on nation building from Hathi Committee Report.  Annexure I of Hathi Committee Report lists out “HUNDREDS” of APIs - bulk drugs”, their quantities manufactured in India along with the list of Indian Bulk Drug manufacturers for each bulk drug.  Often there were 8 to 10 manufacturers (ex:- Isoniazid, Paracetamol, Niacinamide) for some items.  Surprisingly, the list of “Sera and Vaccine” manufacturers were mind-boggling (I get “goose pumps” reminiscing these times).  Jaisukhlal Hathi, who headed the illustrious Hathi Committee, had thanked such stalwards like  D.K. Barua,  Shah Nawaz Khan, Dr. Karan Singh and  K.D. Malaviya for encouragement and assistance.

Among those who assisted Hathi Committee in 1975 was K.R. Ganesh, M.P. from Andamans who was also the Minster of State for Petroleum and Chemicals, under whom the pharmaceutical department was positioned ever since. K.R. Ganesh thereafter, pioneered the new Drug Policy of 1978.

The new Drug Policy of 1978 which along with the Price Control order of 1979 were indeed landmark events for Indian pharma industry.  The NGOs and Civil Society of today, who considers pharma manufacturers as evil profiteers and exploiters have something to learn from the co-operative spirit of all concerned, civil servants (Secretaries), civil society, MPs (Members of Parliaments belonging to all parties) even few ministers and leading medical doctors in brainstorming to formulate the new Drug Policy of 1978 and the first DPCO of 1978.  The policy was drafted to give a “DIRECTIONAL THRUST” to the Indian Pharma.

Manufacturing of bulk drugs and formulations in India were considered by all as essential to India.  The “directional encouragement” with incentives such as Dual Pricing (imported vs. locally manufactured) and compulsory manufacturing of bulk drugs to qualify to sell formulations were highlights of the 1978 drug policy.  If Drug Policy 1978 helped the growth of Indian pharma Industry, the 1986 Drug Policy and the 1987 DPCO (Drug Price Control Order) provided the real thrust to the Indian Pharma.  Ratio parameter was introduced with a 1 : 5 ratio for MNCs (between bulk drugs to formulations) and 1 : 10 ratio for domestic companies.

Bulk drug manufacturers (with captive use in formulations) were essentially required to sell 50 per cent of production to others.  Dr. Venketa Narayanan, the Joint Secretary in the Chemicals Ministry who had become Executive Director of IDMA (Indian Drug Manufacturers’ Association) in Delhi, contributed extensively in the drafting and compilation of the Drug Policy of 1986 and the DPCO 1987.  The industrial licensing was liberalized as well as the list of price controlled drugs was pruned.  These gave major fillip to growth of pharma industry.  The emphasis on import substitution and saving of foreign exchange through self-reliance along with incentives for exports were major catalysts for growth of pharma industry till the nineties.

After ratifying WTO & TRIPs by India, the growth of the pharmaceutical industry was substantially driven by the entrepreneurial risk-taking attitude and action plans of the Indian pharmaceutical industry.  The government, on its part carried out the first,second and third amendments to the (Indian) Patents Act, 1970, fully utilizing the flexibilities enshrined in TRIPs Agreement.  THE FACT THAT the amended Patents Act, 1970 has never challenged for nearly 20 years, is by itself clear evidence and guarantee that the Indian Patent Law as it exists, is TRIPs compliant.  The legal challenge through the non-TRIPs compliant allegation in the High Court of Madras and the Supreme Court failed (related to Gleevec case).

It was imperative of for Indian pharmaceutical industry to have undertaken massive R&D operations.  However, the environment in India has been turning bad to worst in the last 10 years in R&D area.  Commerce Ministry under successive ministries post WTO/TRIPs, such as  Arun Jaitley,  Murasoli Maran,  Anand Sharma and others as well as successive secretaries, Rajiv Khullar and  Rajeev Kher have been providing all out support to the Indian Pharma, not only encouraging improvements in quality, packaging and regulatory systems, but also in overcoming the ever-increasing NTB (Non-tariff Barriers to Trade) and challenges and threats from time to time.

However, on the domestic front, the Indian pharma has been facing rough weather throughout the last two decades.  Pharma industry has become an orphan industry, of late.  In the seventies and eighties, the pharma sector/department being “bulk drug/API” driven, was rightly placed under the Chemical Ministry.  From the nineties through the new millennium, the pharma industry became more and more “regulatory driven” with new GMP requirements, ICH (International Conference on Harmonization) guidelines and CTD (Common Technical Dossiers) etc.  Of late, there have been increasing shift from small (chemical) molecule drugs to large (peptide & biotech) molecule APIs and medicines.  The DPEA (Drug Price Equalization Account) set up under the 1978 drug policy to encourage bulk drug production in the country with dual pricing formula, vis-à-vis imports, was heavily abused thereafter by blatantly misusing the provisions to penalize the bulk drug (API) industry in India.  To add insult to injury, the National Pharmaceutical Pricing Authority (NPPA) set up to regulate pharma pricing, was turned into an “anti drug industry” module over the years.  I wonder if the civil society, who do not appreciate the need for supporting pharma R&D in India and the need for adequate compensation to the investors, stakeholders and risk-takers in pharma industry, had a role to play in turning NPPA to the “Demon” (Bhasmasura ?) it has turned to become today.

Around the same time, major crisis has gripped the clinical trial sector and systems in India.  Consequently, there is a flight of innovative Indian Pharma R&D from India.  The API industry in India has also got crippled due to lack of leadership from the parent Chemicals Ministry.  A look at the list of past ministers heading Chemicals Ministry will make pathetic reading.  The last few ministers never (obviously) met, spoke or interacted with the pharma industry as term after term, the least qualified were receiving this (unfortunate for us) portfolio.  Unless concrete steps are initiated by the new government, the API industry will wither and innovative R&D will move out to greener pastures.  A fresh outlook by the government is essential to revamp the Indian pharmaceutical industry.

WTO/TRIPs and recent developments
WTO and TRIPs, which were the products of the Uruguay Round of the GATT, was predicted to be the biggest threat to Indian pharma industry.  During the protracted negotiations in Geneva and also in India, there was too much “dooms day” predictions.  Extensive deliberations were held with successive US Trade Representatives like Carla Hills and Mickey Kantor and the initiator of TRIPs Sir Arthur Dunkel, through the Dunkel Draft Treaty (nicknamed in India as the DDT) and others.  After much give and take-based compromise formulas and languages, consensus was reached and the TRIPs (Trade Related Aspects Intellectual Property Rights) was born.  Contrary to “dooms day predictions”, Indian Pharma grew by leaps and bounds in the new WTO/TRIPs regime.  This was primarily because of two reasons.  Indian Pharma had till then been floating directionless and in a semi-napping mode.  WTO/TRIPs woke them up and led to increased diligence and self-introspection. Secondly, the realization of opportunities beyond domestic shores and the need for learning the new rules of the game dawned on the Indian Pharma.  Once they were mastered, India did not have to look back.  In fact, Indian Pharma’s growth rate has been the best in the 1995 to 2005 period.  Indian Pharma entrepreneurs deserve kudos and commendations for picking up the gauntlet.  The Indian Parliament and the Government extended themselves fully to incorporate and retain full TRIPs flexibilities through the three amendments of the Patents Act (1970) to become TRIPs compliant by 1.1.2005.

Even as early as the seventies, the MNCs have been playing the “quality trump card” against India.  This was further expressed in the then sophisticated language of “Bioequivalence”.  The medical profession was intensively briefed about ‘Bioequivalence’ not being the same as chemical equivalence (I recall these campaign when I see and hear the current biosimilar campaigns, which appears tougher to bell).  The Indian Pharma came up to master the bioequivalence challenge also, very soon.  This negative campaign of the MNCs was put almost to rest by an unbiased study done through a Public Testing Laboratory on the branded Indian version of innovators’ Chloramphenicol capsules compared with the Indian version (Mac Laboratories).  The test revealed the Indian version having better bioequivalence.

For a couple of decades the quality issue never came up against the generic pharma industry.  Similarly, the bioequivalence dispute was experimentally resolved also between the Salbutamol and Metronidazole litigations which were in progress at that time where the Indian companies Cipla and JB Chemical (Unique) were sued by Glaxo and May & Baker respectively.

In the meantime, the flexibilities in the TRIPs regime came up at Doha in 2001.  The then Commerce Minister, Murasoli Maran did press India’s views strongly at Doha.  As acclaimed (now fizzled out) Doha Declaration acknowledged the affordable access exemptions to pharmaceuticals in least developed and developing countries and proposed solutions.  However, successive commerce ministers and secretaries as well as India’s trade negotiators in 2001 to 2010 did not press the advantage of Doha home.  Consequently, the TRIPs Council made tough procedural hurdles and bottlenecks in implementing the compulsory license provisions for third world countries and exports.  This was partly because of the lack of support to India from other third world countries also.

WTO and TRIPs did not meet the growth expectations of the developed countries.  To their dismay, countries like India, China, Brazil and others grew commendably in the pharma field during 1995 to 2010.  This led to closed door discussions and deliberations among the developed nations and few friendly trading partner nations which further resulted in alternate treaties and agreements being initiated.  The languages and proposals were much more stronger, harder and binding irrevocably on the member countries and by the member countries against third world non-member countries.  One such agreement was ACTA (Anti-Counterfeiting Trade Agreement).  The document draft agreement and negotiations were strictly kept confidential.  However, once these documents, terms and definitions became public, there was very strong reaction not only from the third world countries, but also from some of the ACTA members themselves.  Consequently, ACTA was put to rest, as it appears (even though there are strong efforts in progress to revise ACTA in some other form).

All post-WTO/TRIPs proposals from developed nations focused on bringing generic pharmaceuticals from third world countries under the definition of “Counterfeit” and/or “Spurious”.  According to these proposed agreements only the innovators branded product is genuine and rest of them all, called copies, are to be treated as “counterfeits”, violative of one or other form of IP.  ACTA having failed (at least as on date), other treaty proposals surfaced.

 USA and Europe came up with the TTIP (Transatlantic Trade and Investment Partnership)  which is under finalization.  USA, Japan, Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam came together under the TPPA (Trans-Pacific Partnership Agreement).  These negotiations also were in camera and all related documents and drafts were strictly confidential.  However, once these became public (or got leaked out), reservations surfaced from the TPPA members themselves.  TPPA is still to be finalized as the draft appears to evade consensus.

In the meantime, a more practical, transparent and moderate revision of a multilateral treaty proposal (RCEP) came up.  ASEAN has already made strong presence by then and had been having bilateral or regional agreements with non-ASEAN members.  In fact, India has already signed bilateral trade agreements (FTAs) with Japan (CEPA) and ASEAN among others.  The Intellectual Property terms (at least till recently) were similar to the FTAs already signed by India (even though the impact of the FTAs with Japan, ASEAN and others are yet to be seen or realized).  In this context, India need to strengthen the ongoing RCEP (Regional Comprehensive Economic Partnership) negotiations with needful cautions and exceptions.  India needs to overcome its fear of multilateral treaties and must look at joining them for increasing India’s global trade.  The IP proposal from Japan need to be evaluated and moderated in RCEP to the levels of FTAs with Japan, ASEAN and others.

Having met with little success in containing the growth of Indian Pharma, there is concerted efforts to revive allegations of piracy and counterfeits once again, SSFFC (Substandard/spurious/falsely-labelled/falsified/counterfeit medical products) is one such example.  There is increasing attack on quality, documentation, GMP practices against Indian pharma, once again.  Contrary to undertakings and understandings in WTO and WIPO, USA has also been brandishing the Super 301 threat against India.  The brandishing of NTBs and TBTs against Indian pharma is presently in full swing.  The concerted threats on Indian Pharma on quality and on IP fronts need to be countered or tempered down.  India need to be proactive once again.  The likes of the NPPA and the “activist” like attitude of people at helm of affairs and the witch-hunting the Indian pharma does not help at this juncture at all.  To add insult to injury, the already divergent triumvirate of health, chemicals + pharma and commerce are now joined by the virulent NPPA.  DIPP fortunately is busy putting their house including the Patent and Trademark Office in order and establishing the WIPO-ISA-IPEA office in Delhi.  It is absolutely essential at this juncture for the health, chem-pharma, commerce, environment, finance, industry, MSME ministries and departments such as DIPP to come together to handhold the Indian pharma through the current turbulent global waters and currents.

Indian Pharma needs to put their house in order too.  The medical fraternity and the clinical research operators need to also reign themselves in, in this hour of introspection.  Good pricing practices on medicines which are out of price control need to be put in place voluntarily by the industry.  The unethical practices in the “ethical marketing” operations should be brought to rest, seeking co-operation from the medical professionals and their associations.  A total review, to put in place a globally valid “Good Clinical Practices”, is called for.  Indian pharma should also do their “homework” well and operate globally without inviting litigations on the IP (Trademark, passing off, copyright and patent violations) front as well as on the quality and inspection front.

Indian Pharma is at crossroads.  Instead of concentrating on building on the foundations of past achievements, Indian Pharma is kept busy by multiple government agencies, both Indian and overseas (the latter for obvious reasons).  India need to re-emphasize on quality and good practices in all related areas.  India’s past progress and growth became possible by technical support from regulatory agencies.  The best example is that pharma industry progressed well in states (Maharashtra, Gujarat, Karnataka to name a few) where the state FDAs were technically and professionally strong.  

The Indian Central regulator, the office of the CDSCO and the DCGI must be empowered to reach global standards both in technical contents and infrastructure with networks.  Indian pharma regulator must develop “quid pro quo” status and capabilities to meet overseas regulators “eye to eye” and must commence “quid pro quo” inspections of countries involving pharma trade.

Growth aspirations of Indian Pharma, brings with it, responsibilities and commitments voluntarily.  Same applies for the pharma regulators too.  Even though we do see negative issues in many global initiatives, Indian pharma need to relook or revisit their stand vis-à-vis such agencies.  India need to become an observer at the ICH (International Conference on Harmonization) so that the Indian generic pharma can benefit by gaining observer status (at least) in IGDRP (International Generic Drug Regulators).

Indian Pharma and India as a whole has come of age and hence time may be ripe to look at shedding its fears and joining global initiatives for improving quality and discipline in international trade.  RCEP could provide India, much needed confidence in trade negotiations emphasizing on cautionary areas and fields needing exemptions, such as affordable access.  India need to overcome the fear of global treaties such as RCEP.  Let us recall that such fears were predominant in the pre-WTO negotiation period also.  India should build self-confidence put India’s house in order to scale greater heights in global pharma trade and innovative research.

(The author is  CEO of Gopakumar Nair Associates)

 
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