The Indian pharma industry has gained significant global presence in the last few years and has been competing with other major countries on equal terms. Its remarkable growth can be attributed to its ability to rapidly access and adopt new technologies and also to its success in evolving an effective mechanism to strengthen research and development.
The industry's advanced manufacturing facilities have earned laurels from global regulatory authorities. As a result, the world today turns to the Indian pharma industry not only for high-quality and low-cost generic drugs, but also for in-licensing and out -licensing of drugs. The robust Indian pharma industry today produces a range of formulations, has the expertise for active pharmaceutical ingredients (APIs) and sees significant opportunities for value-creation. Hence, the theme of the 63rd edition of IPC, ‘Pharma Vision 2020: India: The Pharma Power house’, encapsulates the present stature of the Indian pharma industry.
India, the pharma power house
India ranks third in terms of manufacturing pharma products by volume and 14th in value terms globally. The Indian industry produces around 20 to 24 per cent of the global generic drugs.
The significant changes in the global pharma market offer immense opportunity for Indian pharma industry. Patents around $13 billion in the U.S. revenue of blockbuster drugs expired in 2007 and patents worth $ 60 billion will expire by 2012. As a result, the newly available market will be filled by generics worth $73 billion , says SM Mudda, chairman, scientific services, Local Organizing Committee and Executive Director- Technical & Operations, Micro Labs Ltd, some
India is capable of capturing this opportunity and can become a global base for outsourcing of pharmaceuticals since it has advantages over other countries of the world. The estimated turnover of the Indian pharmaceutical industry is Rs. 84,000 crore or US$ 21 billion with an annual growth rate of 13 per cent, he added.
The country is a leading global provider already with an export turnover of over Rs. 40,000 crore or US$ 10 billion to 200 countries. There is a strong manufacturing infrastructure with approximately 161 USFDA, 90 MHRA and 1,000 WHO GMP approved world-class manufacturing facilities in India.
Almost 25 per cent of global Abbreviated New Drug Application (ANDA) filings are from India. There is also an abundance of scientific manpower. The country is an excellent centre for clinical trials in view of the diversity in population.
With a stable economy and 10 to 13 per cent growth rate of the industry compared to four to five per cent in the developed countries, India can become a pharma power house and can look forward to be a global destination for manufacturing, R&D and clinical studies of generic formulations as well as new molecules pharmaceuticals, said Mudda.
According to Suresh Khanna, Honorary Joint Secretary, Local Organizing Committee of 63rd IPC and chairman, Stabicon Lifesciences Pvt Ltd, with a number of drugs going off patent, India sees a big opportunity to encash this. Also competitive costs of manufacture of quality products and known efficiency in supply chain, places India in a very favourable situation. Even clinical research organizations (CROs) are expected to see increased business in the coming years.
Indian pharma sector has grown big in the area of generic products locally as well in the international level. To graduate to the next level, domestic companies need to invest in R&D to innovate medicines to meet unmet needs of patients said Dr Premnath Shenoy, Hon. Secretary, Karnataka Drugs & Pharmaceutical Manufacturers Association (KDPMA).
For this Government should come out with an industry friendly long- term policy for the sector which could include incentives for investment in R&D, liberalization of pricing of pharmaceuticals and so on, he added.
According to SG. Biligiri, President, Karnataka Drugs and Pharmaceuticals Manufacturers Association and Associate Secretary, 63rd IPC, for India to become a pharma power house, it will need to emphasize on biosimilar development and marketing since that is the future. The country will also need to look for collaborative R & D efforts and give a fillip to the open source drug discovery model.
The growing pharma sector & govt support
Though the government recognized the remarkable growth of this industry and are taking certain initiatives to support the modernization of the industry, regulatory mechanism, training and education, a lot more needs to be done to encourage the domestic industry in terms of making it competitive compared to Chinese API industry, said Mudda.
The regulatory standards have to be raised on par with the developed countries and all possible assistance has to be given to small-scale industry to encourage compliance with the Good Manufacturing Practices. Although some of the larger companies have taken some steps towards drug innovation, the industry as a whole has been following the business model of using their expertise in reverse-engineering new processes for manufacturing drugs at low costs until recently. The government needs to support the R&D initiative in a big way for encouraging development of new molecules and innovative delivery systems, averred Mudda.
The Pharmexcil , sponsored by the Ministry of Commerce is doing excellent work by organizing buyer- seller meets, participating in trade fairs, delegation visits to potential countries, imparting Intellectual Property Rights (IPRs) knowledge and even giving subsidies for product registration, overseas visits and for participation in industry fairs. The Government also supports the industry by providing necessary documentation for product registration and subsequent exports.
However, the government could consider giving incentives to make manufacturing activities efficient like formation of pharma specific clusters, thereby ensuring world class infrastructure particularly uninterrupted supply of power. It can also help by expediting the process of import and export and to set systems to speedily issue documents required for exports like Product Permissions, Certificate of Pharmaceutical Products CoPP/ Foreign Sales Corporation (FSC), no objection certificates (NOCs) for imports, opined Khanna.
According to Dr. Shenoy, if the government takes immediate steps in the above areas, the industry would be immensly benefited and would grow at a much higher pace.
“Despite the tax holidays and investor meets organized by the Union government, it needs to focus on setting up more infrastructure and create an eco-system as well as initiatives such as pharma parks,” said Biligiri.
Karnataka pharma industry gets traction
South India is an attractive destination since it offers availability of scientific and technical expertise, academic research facilities, environment conducive to innovation, English language and competitive compensation. South India's expertise in information technology (IT) skills combined with strong knowledge in pharma domain is ideal for drug development and clinical research activities. All the companies in Karnataka are having world-class manufacturing facilities coupled with advance research centres.
The Karnataka Drugs Control Department has been progressive in its outlook and encourages manufacturers of quality products. The industry is on the same footing in terms of standards of infrastructure, quality of products, global regulatory approvals and investment in R&D with other leading states such as Maharashtra, Gujarat and Andhra Pradesh. Being a quality conscious industry supported by a progressive Drug Control Administration, the industry can grow enormously in terms of size.
Karnataka has emerged as a centre for generics, medical devices, biotech and drug discovery. The share of Karnataka drug industry is at five per cent of the national sales turnover which stands at Rs.6500 crore growing at 15 per cent per annum, with 251 companies in the fray. The state is active in pharma services such as bioinformatics, research support services, Contact Manufacturing of generic formulations for some of the world’s major generics manufacturers is handled successfully by many companies in Karnataka. The list includes companies like Strides Arcolab, Micro Labs Ltd , Medreich and Medopharm.
Some of the leading players are Micro Labs in formulations , API ,Research and Development and export to regulated markets, Biocon in biotechnology is a national leader, Strides Arcolab and Medreich in exports to regulated markets, Himalaya Drug Company in herbal products, Astra Zeneca in Research & Development. Strides, Micro Labs and Medreich have key alliances with global players, said Mudda.
According to Khanna, the Government of Karnataka is coming out with a draft pharma policy soon to encourage the industry. Karnataka has many companies now with approvals from highly regulated countries. The biopharma industries have taken the lead role in India. The CRO industry is supporting as the catalyst for the forward integration of research and commercialization. Added to this is the number of academic and research institutions of excellence.
Expressing similar views, Dr. Shenoy pointed out that some of the domestic companies have specialized in the area of exports and contract manufacturing. Many units have obtained approvals from regulatory authorities such as USFDA, MHRA,TGA etc. Bangalore has also attracted many leading domestic and multinational companies (MNCs) to get their products manufactured at these units, since the last IPC was held here in 1993 .
Need for more incentives
However many of the industry experts feel that much more is needed to make Bangalore a pharma hub.
“Bangalore has not earned the title Pharma Hub, Investments by new companies and existing companies has not been substantial to make Bangalore a ‘ Pharma Hub’said Shenoy.
According to Khanna, “though the number of companies are small as compared to other major hubs, we are witnessing a steady growth in volumes from these companies both for domestic and exports markets. Another significant aspect is that a number of companies have regulatory approvals from some of the most advanced countries and are regularly exporting products to USA, UK, EU, LATAM and Japan among others. A number of academic institutions imparting pharmacy education, research centres of excellence are now based in the state”.
Madhusudan V, Global Operations, Banner Pharmacaps, USA who was an integral part of the Karnataka pharma sector till he went abroad, said that the positive aspects are the growth of the research institutions and consolidation of the prevailing industry. The consolidation was possibly the general wave going through India for pharma in view of the increased export boom. However, the growth of research organizations in Karnataka is a welcome sign. Karnataka, more so Bangalore, has been home for quality pharma manufacturers. This aspect seems to have strengthened over the last 16 years. India, in general has taken up R&D seriously in the last two decades and many companies have selected Bangalore as the location. This is clearly a credit to the ‘intelligentsia’ for which Bangalore is reputed and the ‘salubrious climate’ here.
However, it is disappointing to see the Government not doing much to make Karnataka a destination for newer manufacturing companies. In addition to this the fast growth of service industry and IT sector have made Bangalore an expensive place. Having seen the progress over the last two decades, one is not hopeful for a new thrust for pharma industry in Bangalore. This is partly due to inaction on the part of Government to improve the infrastructure and also encourage the industry through special incentives. The aspects of overcrowded roads and associated traffic problems, increasing cost of living, strain on infrastructure are not improving the chances of Bangalore becoming a major hub, averred Madhusudan.
Since the last IPC in Bangalore, some of the domestic companies have specialized in the area of exports and contract manufacturing, said Biligiri.
Growing capabilities
Pharmaceuticals is in the front rank of India’s science-based industries with a wide ranging capabilities in the complex field of drug manufacture and technology. It ranks high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.
According to Mudda the industry has set its target on the global market and is confident to maintain and improve upon the current growth rate. The achievements so far stand as the testimony of its resolve to become a global pharma powerhouse.
Trends seen are commodization of brands and severe competition. Pharma companies are also into nutraceuticals and food - based products. There are also many units shifting towards biotech medicines, and cardio-metabolic drugs, said Biligiri.
“Almost all major companies operating globally have some kind of presence in India , in one form or the other here by way of R&D, outsourcing products and CRO activities to name a few. This is no mean achievement and this trend is bound to grow further in the years to come. Moreover India’s major business houses of the old economy are now investing in healthcare and pharma related industries like CRO, drug discovery etc which are encouraging trends,” said Khanna.
However intense competition, numerous regulatory changes leading to delays in approvals and non uniformity in implementation of regulations are playing spoilsport bemoaned Dr. Shenoy.
The roadblocks
Investments in innovative R&D has always taken a back seat amongst Indian pharmaceutical companies. In order to stay competitive in the future, we will have to refocus and invest heavily in R&D. Lack of resources to compete with multinational companies (MNCs) for new drug discovery research and to commercialize molecules on a world-wide basis and inadequate regulatory standards are the major issues plaguing the industry. The industry has to deal with the Drug Price Control Order (DPCO) and is yet to understand the impact of the new proposed pricing policy. Developing a global mindset for quality and adopting the Quality Management System-based and risk-based approaches for implementation of Good Manufacturing Practices is also essential , said Mudda.
“Products need to be manufactured at economies-of-scale. There is a need for proactive support from government in policies and speedy execution at all levels to bring in the desired competitive edge. This would support the cost advantage to domestic market as well as at the international market,” informed Khanna.
Expressing his view point, Dr. Shenoy said that frequent changes in the guidelines from regulators lead to lack of clarity, inconsistency in implementation of Drugs & Cosmetic Rules in different states, lack of good infrastructure including clean power and water as well as industry employable graduates are some of the challenges faced by the industry.
According to Madhusudan, the aspect of irrational price control is continuing to plague the pharma industry. However, now it has the option of getting out of the price control by focusing on exports. At the same time thanks to the price control system in India, the cost of medicines are reasonable to the common man when compared to other countries, he added.
The industry’s future lies in catering to growing domestic market and regulated markets in developed countries. While the requirements of the domestic market are well understood by the industry, it should lay emphasis of meeting the ‘soft requirements’ of developed markets. It is critical that the industry should realize that it needs to cash in on the opportunity of being a major and preferred destination for pharma outsourcing.
These ‘soft requirements/ skills’ include adhering to timelines, ensuring transparency, avoiding over- commitments, detailed planning, maintaining high level of confidentiality and build value - system at all levels to ensure that India remains as a pharma powerhouse house, averred Madhusudan.
Major issues facing the Indian pharma industry are price control, poor infrastructure, corruption and commercialization of medical practice which includes doctors seeking too many pecuniary benefits , said industry sources.