India is among the top five pharmaceutical emerging markets and accounts for over 10 per cent of global pharmaceutical
production. The sector has made significant inroads into research and manufacture of pharmaceuticals, clinical trials and adoption of information technology and advanced processes. India is a front runner in terms of intellectual capabilities and entrepreneurship, said Kaushik Desai, pharma consultant, Hon. General Secretary, Indian Pharmaceutical Association and Chairperson, Industrial Pharmacy Section, Federation of Asian Pharmaceutical Associations (FAPA) in an email interview with Nandita Vijay. Excerpts:
What is your perception of Indian pharma industry ?
Indian pharmaceutical industry has matured and expanded exponentially in the last few decades. The rapidly pacing and a striking aspect of this sector is the robust adoption of high technology in research and manufacture. The sound expertise of its personnel has largely fuelled these developments. The sector has clocked a 12-14 per cent consistent growth rate with a $23 billion (Rs.1.38 lakh crore) turnover in fiscal 2014 and is expected to touch $45 billion in 2020. India is among the top five pharmaceutical emerging markets and accounts for over 10 per cent of global pharmaceutical production.
How much would Prime Minster Narendra Modi’s ‘Make in India’ campaign benefit this sector?
Prime Minister Narendra Modi’s ‘Make in India’ campaign is yet to witness a concrete plan of action. Pharma industry is hoping for the creation of an industry-friendly environment with time- bound regulatory and related clearances.
What are the key risks encountered by the industry to achieve operational excellence at the production plants across the country?
Operational excellence is the current buzz word which is expected to spur future developments in the wake of drug price control order, limitations in faster introduction of new products and rising utility expenses. These impediments are forcing companies to re-device strategies to curtail costs without compromising on product quality and regulatory lapses. However, there are challenges in accessing qualified and experienced expertise along with fresh industry-ready workforce to meet the needs of automation and documentation as per global regulatory norms.
Do you feel the Union government’s pharma excise free zone concept is relevant in the current scenario to maximize profits?
The government’s intention was noble in taking proactive steps to ensure overall growth across states. Himachal Pradesh, Uttarakhand, J&K and North East were identified to establish manufacturing facilities with a series of tax incentives. But subsequently the policies kept changing particularly on excise duty which made the earlier incentives redundant. The retention of skilled staff is a major issue in these zones as the state and the central governments failed to provide required infrastructure for pharma professionals to relocate. Companies that invested here got a return on investment (ROI) in less than 10 years but are not keen to expand further. Largely, the excise free zones could have been a successful model if the government devised an infrastructure master plan instead it was a piecemeal for political gains.
What according to you is the biggest change in the Indian pharma industry?
There are several changes that began from 2010. Clinical research and contract research evolved. The shift to prescribe generic drugs by developed economies to control rising healthcare costs transformed the opportunities for Indian pharma. Patent expiries helped to focus on generic drug development. Presently, 67 per cent prescriptions in the US are for generic drugs which are an advantage for India. A similar trend prevails in the emerging markets. The ROI of new drugs with high research investment and low chances of clinical trial success altered the conventional pharma business model. The sound and solid expertise in information technology has led to the establishment of SMAC (social media, mobile phones, big data analytics and cloud computing) for pharma sector to move to the next level of growth to ensure transparency and efficiency in the wake of increased global regulatory scrutiny. Development of biologicals, biosimilars, nutraceuticals and niche-novel drug delivery systems are gaining momentum.
Do you think Indian pharma image has taken a beating in the global arena following the international regulatory warnings?
Yes, to some extent industry has taken a beating following the recent regulatory warning letters. But, this trend is expected to change. The export business may not have much impact as projected by these actions. Companies are gearing up by adopting timely remedial measures to face this challenge. Indians are quite adaptable and will bounce back with better business strategies. However, it is heartening to note that none of the warning letters are related to quality issues resulting in a product recall. The in-house operation system related issues can be taken care with change in mindset from top management to shop floor and with much better controls.
As the FAPA Chairperson of Industrial Pharmacy Section for 2014-2018, you mentioned India as a leading pharma manufacturing hub among Asian countries. But, the reality is that China, Malaysia, Vietnam and Korea are preferred by global companies over India. Please comment?
The growth of Indian pharma has given rise to these Asian countries to develop an efficient game-plan and compete head-on with our drug manufacturing prowess. India is far ahead in terms of intellectual capabilities and entrepreneurship. The cost of manufacturing is more in other Asian countries except Vietnam but they have limited talent pool. It will take some time for other emerging Asian countries to be on par with India for the short-term. But for the long-run, India must not ignore possible imminent threats. The Union government should embark on better policies for the industry to remain at the forefront. China has its own strengths and weaknesses. It might have the volumes in chemicals and APIs with advanced infrastructure. But it is not the plant size but compliance along and product approvals which make India a preferred manufacturing hub. In terms of volume, India is the third largest manufacturer in the world after China and US. It is far ahead in formulations and the regulatory enforcement is better established over other Asian countries including China. Now, my role in FAPA is to portray Indian pharma prowess to the other Asian countries.
Industrial Pharmacy Division (IPD) is a key part of the Indian Pharmaceutical Association; could you enlist some of the efforts to build up plant operations specifically for the SME sector?
IPD is a key part of Indian Pharmaceutical Association. It focuses on knowledge sharing and training on technological advances and regulatory changes. Its knowledge bank initiative gives the industry a head start to adhere to latest guidelines. The small-medium enterprises (SMEs) are benefited particularly in formulating export strategies. In collaboration with Indian Institute of Management, Bangalore and University of St. Gallen, Switzerland, a leading European B-School it is conducting a survey on operational excellence in the pharmaceutical manufacturing sector. The survey results would provide an insight on current and future of the industry particularly SMEs.
Would the patent expiries be a lucrative business opportunity for Indian pharma?
Yes, the patent expiries would be a lucrative business opportunity. However, companies need to work well in advance of the patent expiry to be ready with the generic version. Creation of a special cell to keep a tab on their patent expiry drugs is vital.
Would the new US, EU, ANVISA and TGA etc regulations be difficult for SMEs to cope with?
Compliance to any updated regulations is a challenge. It is necessary to gear up well in advance, be proactive and keep a constant watch on changes that would impact growth opportunities which would eventually benefit in the longer run to sustain in the market. Our pharmacy education standards also need to be changed to prepare young pharmacists to cope with the regulatory challenges by starting courses on regulatory science.
However, I strongly recommend harmonization of regulatory standards. Although, initiatives are taken by some countries, yet a unified approach is needed on priority. India should take a lead at least in Asia to have a common understanding on accepting each other’s regulatory guidelines. This will facilitate SMEs in their product registrations and exports. Efforts to make the Indian Pharmacopoeia an acceptable reference standard in the Asian region could eventually be a step forward to global regulatory harmonization.
What are the key issues hampering Indian pharma growth?
There are many issues beginning from timely approval of clinical trials, uniform implementation of regulatory guidelines across states, creation of skilled manpower and industry-friendly policies, encourage innovations besides prevalence of excessive price control where the government needs to balance pricing, affordability and accessibility.
What is the future of the Indian pharma? Would mergers and acquisitions have relevance to drive its growth and survival?
The future of Indian pharma is bright as the new government has given positive signals to create industry-friendly environment and support exports. But, the government needs to move at an extremely fast pace to implement related policies and regulations with involvement of all stake holders. In line with the trends, issues and challenges in the global and Indian pharma sector, the companies need to focus on accelerating drug discovery, advancing clinical trial efficiencies, increasing manufacturing productivity, improving operational efficiencies and reducing costs.
Mergers and acquisitions give companies instant advantage of market access. India pharma will witness increased M&A in the coming years which will enhance its global image and generate 15 per cent annual growth.