A slew of patent expiries, demand for generics and biosimilars, growing incidence of diseases and demand for lowering healthcare costs are the factors in the markets of Middle East and South America that attract the Indian pharma and biotech companies to view these two countries as key export destinations.
Both Middle East and South America are on a high growth trajectory.
Union government is now keen to consolidate its economic and trade relations with the markets of Middle East which includes Gulf States covering Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. These countries are also members of the Gulf Cooperation Council (GCC) which has adopted a ‘Look East’ policy that further strengthens India’s stand to trade with these countries. The Indian pharmaceutical and the biotechnology industry are now viewing to bolster their international marketing opportunities in the Middle East region as it has begun to focus on a Look East Policy. Moreover with the EU ban on 700 Indian-made generic drugs early this month has led many Indian companies to consider the Middle East to bolster their growth prospects.
In 2013, four Latin American countries, Brazil, Mexico, Venezuela and Argentina, were in the list of top 25 countries for pharmaceutical sales and by 2022 their sales are expected to more than double. Brazil, the leading market in Latin America, is expected to become the fourth biggest market for pharmaceuticals by 2022 with its value estimated at US$ 61.05 billion and the pharmaceutical sales within Latin America are expected to increase by 119 per cent from 2008 to 2021, according to McCann Health study.
Middle East is a market with good potential and tremendous business opportunities. It is also a prominent gateway to West Africa. The region is a market with 400 million people and solid financial stability. Further, the region has launched the strategic ‘Look East’ policy to explore investment and business opportunities in East Asian countries, according to Indian pharma companies like Glenmark, Dishman among others.
From Karnataka, Biocon, Micro Labs, Bal Pharma, Srushti Pharmaceuticals and the Himalaya Drug Company have a presence in the region.
According to Dr P V Appaji, Director General of Pharmaceuticals Promotion Council of India (Pharmexcil), Latin American countries have great opportunities for the Indian exports. Pharma companies in India are devising strategies to move into South America which is now introducing various policies. For instance policies are being introduced related to the strengthening of Intellectual Property Regime protection laws, providing incentives and tax exemptions to domestic companies to improve marketing and distribution channels.
Brazil and Argentina specifically are considered important markets from a pharma perspective for India in the future. Despite the significant presence of multinational companies in these countries, India’s approach in terms of cost-effectiveness coupled with the right partnering or acquisition moves are seen to help considerably in making a successful headway in the region, added Dr Appaji.
According to Jatish N Seth, president, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) and director, Srushti Pharmaceuticals, this is a good market provided the approvals from regulators come through soon. We are present in the non-GCC region, but our products are routed via Dubai. There is no doubt that Middle East is the market for the future for Indian pharma provided regulatory clearances are at a faster pace.
Biocon is the largest player from Karnataka in the Middle East. It was in 2007 that Biocon and Abu Dhabi based pharmaceutical company Neopharma signed a pact to establish a joint venture company ‘NeoBiocon’ located at the Dubai Biotechnology & Research Park in the UAE to manufacture and market a range of biopharmaceuticals in cardiology, diabetology and oncology for the GCC countries, stated Kiran Mazumdar-Shaw, chairman and managing director, Biocon Limited.
“Middle East continues to be a mix of regulated and semi regulated markets. It's a tough one for India to compete when it comes to generics which is largely being served by European region for specialized products. However, we see a positive shift towards India from the Middle East which though slowly because regulations are changing in most of the markets. Bal Pharma is currently working in few countries like UAE, Yemen and Iraq. Our presence can also be seen in Saudi through API division”, stated Archana Dubey Mitra, vice president, international marketing, Bal Pharma Limited.
Himalaya Drug Company has also garnered a significant presence in the Middle East. These include countries of Bahrain, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, UAE and Yemen. The company’s personal care range spanning face, body, hair and oral care is available in the region, along with the baby care range which are much sought-after in the region.
As members of the GCC, many major countries in the Middle East have set aside investments to develop infrastructure and advanced facilities to attract global companies including India, said Gurudatta G G, chief executive officer, Estima Pharma Solutions LLP and a pharma consultant.
Besides, Prime Minister Narendra Modi's recent visit to the region, who is India’s second head of state to visit the United Arab Emirates (UAE) from August 16 and 17, 2015, will see a surge in investment and trade expansion opportunities including pharmaceuticals in the region, noted pharma companies.
Middle East markets cover Bahrain, Cyprus, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen and Palestine Territories. After Israel, Iran, Jordan, Lebanon and Yemen, the drug sector industry in the Middle East region is primarily driven by the Gulf Cooperation Council countries which are Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and the Sultanate of Oman. The region is recognized as an import-dependent marketplace for pharmaceuticals and the economy revolves round fluctuating oil prices.
The GCC is creating ample opportunities for India to trade. This makes Middle East an important location for Indian pharma exports. In the age of mergers and acquisitions, there are many prospects for tie-ups or alliances with companies in the Middle East, said Sriram V Iyer, CEO, Valuegen Pharma Pvt. Ltd.
Imminent trends in South America
India is most likely to score in this region with its range of generics and biosimilars. Biopharmaceuticals are also seen to be an important product in the export basket of Indian companies. Although these products are expensive treatment options for patients, yet these are vastly prescribed because of its potency and lower risk of side effects. Like other emerging economies, Brazil is looking to lower its cost of healthcare and make these treatments accessible to its larger demographics. Indian biosimilars which have been extensively tested clinically and have gone through due process of registration are likely to emerge as the choicest option in this regard, noted experts.
The registration rules and requirements vary for different countries in South America and any player looking to enter these markets will have to manage these head on. It is fortunate that Indian companies like the Sun Pharma, Strides, Zydus and Lupin have had exposure to Latin America and been able to make a mark for the hospital supplies in this market. However, experts do view that the biopharma sale is still untapped and can prove extremely profitable to Indian companies.