As Indian pharmaceutical industry is on the path to align with global standards to increase its overall competitiveness, there is a lot more to do. Innovation and quality management along with cost effectiveness is the key for Indian drug industry to increase their export to global market both regulated as well as unregulated markets.
The experts say that product quality is the only way to survive on the global market, especially against the backdrop of the increasing demand for high quality drugs and the globally rising regulatory scrutiny.
“Product quality will be a competitive advantage especially with the strong competitors on the market. Yes, quality is the only way to survive from global market as end users get well educated about the usage of the products. Main reason Indian pharmaceutical companies have received global respect is due to focus on quality as cost is any way lower, but key is to deliver world class quality consistently,” said SG Deshpande, a pharmaceutical consultant.
Companies have been facing the regulatory challenges for the last couple of years but in 2017, he pointed out, the grounds for warning letters have become more stringent. This has negative impact on our export figure. On the one hand the main business is getting eroded and on the other, due to the regulatory challenges, the companies are not able to receive new product approvals and therefore unable to introduce new products in the market.
The Indian quality management system are in place to ensure passing US FDA inspections but a quality culture needs to be built up. Only quality will sustain the business and thus there is a strong need for continuous improvement, said Deshpande.
India’s pharmaceutical exports stood at US$ 16.4 billion in 2016-17. The pharmaceutical exports dropped by 0.43% in terms of value and 6.95% in terms of volumes in 2016-17. According to C R Chaudhary, Minister of State for Commerce and Industry, some of the reasons for decline in pharma exports include consolidation of buyers in the US into three large groups with significant bargaining power, absence of blockbuster drugs going off-patent and certain Indian companies shifting their manufacturing bases to the US, EU and other overseas markets.
Chaudhary further said that a huge number of Abbreviated New Drugs Applications (ANDA) were permitted by the United Stated Food and Drug Administration (FDA) which led to increase in competition in generics market and resulted in price drops.
In order to boost pharmaceuticals exports from the country, Ministry of Commerce has enhanced incentives for the sector under the Merchandise Exports from India Scheme (MEIS).
According to the Pharmaceuticals Export Promotion Council of India (Pharmexcil), India’s export is expected to grow by 30 per cent over the next three years to reach US$ 20 billion by 2020.
The Pharmexcil has taken a number of initiatives to boost the country's export. It has submitted a proposal to ministry of commerce seeking approval for conducting 12 promotional events I.e buyer-seller meetings, Iphex Delhi, Iphex Africa, Arab Health. Iphex Delhi will be held in May 2018 where 600 buyers from 100 countries are likely to visit. Apart from them, drug regulators, officials from health ministries from these countries would also attend the expo. 300 Indian companies are also participating in it.
Besides this, a delegation from Pharmexcil is set to visit three countries in South East Asia - Indonesia, Vietnam, Myanmar in third week of February 2018. Pharmexcil is also sending a delegation to CIS region in March 2018. The main aim behind this initiative is to facilitate buy-seller meet, interact with regulatory bodies in the country that will help boost export.
Pharmexcil is also targeting Latin American and African markets to promote export. Iphex Africa, being held annually witness participation of 25 African countries including Nigeria, Ghana, Ethiopia, Kenya, South Africa. Iphex Latin America focusing on promoting buyer-seller meet and pharma expo is under pipeline.
In CIS region Russia, Ukraine, Uzbekistan are lucrative market for India. Recently it sent a delegation to these countries to tap the market.
Said Amit Mookim, managing director- South Asia, IQVIA, “In a bid to survive in regulated market, Indian pharmaceutical companies need to increase their product portfolio and introduce newer products. Apart from regulated markets, there is tremendous opportunity in emerging markets which are expected to reach US$ 211 billion by 2022 growing 5 per cent y-o-y.”
With increased regulatory scrutiny, quality will be top priority for every company in the area of exports and simultaneously there are likely to be more stringent regulations by Indian government, said Kaushik Desai, general secretary of Indian Pharmaceutical Association.
With awareness of QBD concepts, pharmacovigilance and economics there will be increasing demand for quality to achieve more safety, he said.
“There is a growing demand for goods with high quality which have to meet international standards. Hence, the quality takes precedence over cost advantage in international business for pharma goods.”
The new product pipeline of the most advanced Indian domestic companies competes with the pipeline of established western pharma companies in major pharma markets outside India.
Big Indian pharma companies are already at par with the generic products of established western pharma companies and will further align closer in 2018. The key drivers to new product pipelines are poor margins from domestic sales, increased speed/automation of patent and regulatory filings and approvals as well as new facilities resulting from the investments.
According to a study, by 2018 almost all of the top 20 Indian pharma companies will be either on a warning letter, enforcement actions, etc., which will account for loss of sales in mega terms. US FDA/EU. GMP are already working on managing drug shortage issues, meaning that they expect more enforcement actions. To bring back the Operational Excellence and quality compliance culture at par with western companies a minimum period of 10 years is foreseen. Indian pharma companies are yet to meet these expectations of international pharma companies and the current trend does not provide that confidence, especially the regulatory compliance.
Innovation and quality management are the key factors helping Indian drug industry overcome regulatory challenges in global market and boost their export revenue.
India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical firms.
The UN-backed Medicines Patent Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine Tenofovir Alafenamide (TAF) for 112 developing countries.
Indian companies received 55 Abbreviated New Drug Application (ANDA) approvals and 16 tentative approvals from the US Food and Drug Administration (FDA) in Q1 of 2017. The US FDA approvals are expected to cross 700 ANDA in 2017, thereby recording a year-on-year growth of 17 per cent. The country accounts for around 30 per cent (by volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.
We are facing regulatory challenges in regulated market taking its toll on the export. In emerging markets there are certain economic issues. In CIS region localisation is a big issue. The exports of Indian pharmaceutical industry to the US will get a boost in FY18, as branded drugs worth US$ 50 billion will become off-patented and Indian companies with good quality and affordable pricing are in advantage position to exploit the opportunity, said SV Veerramani, chairman and managing director of Fourrts and immediate past president of Indian Drug Manufacturers' Association.
Apart from regulatory challenges in some of the markets, merger and acquisitions by Indian pharma companies has also had its effect on export slowdown.
Aurobindo Pharma has bought Portugal based Generis Farmaceutica SA, a generic drug company, for EUR 135 million (US$ 144 million).
Sun Pharmaceutical Industries Ltd, India's largest drug maker, has entered into an agreement with Switzerland-based Novartis AG, to acquire the latter’s branded cancer drug Odomzo for around US$ 175 million.
Kedaara Capital Advisors LLP, a private equity (PE) firm, plans to invest Rs 430 crore (US$ 64.5 million) to acquire a minority stake in Hyderabad-based diagnostics chain Vijaya Diagnostic Centre Pvt Ltd.
Sun Pharmaceuticals Industries Limited plans to acquire 85.1 per cent stake in Russian company Biosintez for US$ 24 million for increasing its presence in Russia through local manufacturing capability.