The roadmap for the future active pharmaceutical ingredient (API) industry is to focus on process design, allocate more time on each task including R&D which would enable resolving any issue during a product life cycle. If the Indian pharma industry adheres to quality assurance and operational excellence, it would regain its trust among international regulators and gain a leadership status globally, says AG Raghu, Technical Director, Gland Chemicals Pvt. Ltd in an interaction with Nandita Vijay. Excerpts:
How would you describe the current API scene in India and global markets?
Globally about 7,000 APIs are functional with a market share of US$120 billion of which the US share is 45 per cent. India has over 2,000 API manufacturing units producing nearly 1,500 APIs, which is worth US$ nine billion. Out of this nearly 50 per cent is for exports. India has an opportunity to grow this business and take more than its current global market share. Indian pharma is in the front rank of the science -based industry. We are strong in chemistry and have competent work force, technologically strong and self reliant, so it is possible to increase our presence in global API market.
What corrective measures according to you are required to increase India’s footprint in the global arena? Do you see the need to allow import registration fee just as the western counterparts?
Though introducing import registration fees is one effective step, it may not greatly improve our stand. More importantly, we should produce quality APIs, intermediates at competitive prices. We should also have the highest standards of regulatory compliance and customer support. This will help us to enhance our international standing.
There is also a serious concern on the quality of imported APIs, which was based merely on the GMP certificates and no international site visits undertaken by DCGI officials to assess the manufacturing standards before approval of imports? Please comment.
Basically, we have concerns with import of APIs and intermediates. These imports are mainly from China where we not only have quality issues, but also in terms of technology along with challenges in communicating with them. In the present international regulatory scenario, we need the vendors’ cooperation for responding to regulatory query or investigation of product compliance etc. In this situation, the industry cannot depend only on the Drugs Control General of India (DCGI) office to certify these vendors. The pharma companies need to have a vendor audit programme and develop a good rapport with them so that they are ready to support when required. Many companies are doing this or outsourcing this activity.
Indian pharma industry deplores the skewed pricing strategy adopted by China when APIs need to be imported. But when India exports the same, the industry in China resorts to arm twisting. Pls comment?
My only one comment is API business is highly price sensitive. But now with Prime Minister Narendra Modi giving more stress on manufacturing and mandating a ‘Made in India ‘ slogan, I am positive that we may get more help from Government to meet the challenges mentioned above enabling development of a zero-defect and zero-effect product.
Which are states in the country that have highest number API facilities?
Gujarat and Maharashtra are at the forefront of API production in terms of manufacturing followed by the undivided Andhra Pradesh which has more API manufacturing facilities.
How much do factors like expertise, reasons for backward integration and contract manufacturing opportunities drive Indian pharma to focus on API?
In the present scenario, drug product manufacturers or the formulators and drug substance manufacturers or APIs should work closely during development and production. Increased regulatory expectations require considerable information from Abbreviated New Drug Application (ANDA) holders, and most of them are related to APIs. Also in a highly competitive environment and first-to-file opportunity, the industry prefers to have constant rapport with the API manufacturer. In fact, this is one of the driving factors for backward integration for APIs. If there is good cGMP compliant facility and expert staff, it is always easy to get contract manufacturing opportunity. It is a strategy for all pharma companies that APIs are sourced from more than one manufacturing site to ensure there is no shortage going by the demand of formulations in various markets. There is an increased interest for production plants which are dedicated units manufacturing anti cancer drugs, growth hormone and Beta- lactums. In addition, companies look at expertise in APIs which will be used initially for formulation development and later for research of new generics which will then leads to backward integration.
What are India's inherent strengths in the API space and what are the APIs, we should focus on?
We are strong in chemistry, manufacturing capabilities and information technology. The pharma Industry is highly organized sector. We have competent and educated English speaking work force enabling technology-transfer and marketing in the regulated regions. These inherent strengths have led the developed countries to depend on India. In my opinion, Indian pharma should focus on niche products. These include those going off-patent and become the first generic suppliers globally. In addition, potent high value products even though being low volume like anti cancer, steroids, antiretroviral and biologics would add value to our drug exports.
What was the impact of the global slowdown of 2008-2013 on the API sector?
Economic slowdown in Europe and the US had an impact on exports for Indian API sector. This is because APIs constituted 50 per cent of exports which primarily covered the US and Europe. The remaining is for captive consumption by our domestic formulation industry. A substantial portion of APIs are for the development of critical care formulations exported from India and this business continues to grow irrespective of the economic slowdown. Falling rupee against dollar during this period was an advantage for exports, but had an impact on import of inputs and other related items which increased our cost of production.
Could you enlist five challenges impacting the API sector?
The first challenge is need for compliance to increase regulatory expectations. Recent series of warning letters and import alerts have created trust deficit in the minds of international regulators. Now our concern is building trust in US, EU & other regulated markets. For this, we should develop a culture of quality across companies and move towards operational excellence.
The second challenge is to reduce cost of production and remain competitive in the global market. There is a need to enhance productivity, put in place efficient process to become more competitive, use technology, automation for process and data acquisition besides increasing capability with training progammes. There is a need for backward integration to make excipients and intermediates to compete with prices of Chinese products.
Complimentary to the first two are next three challenges. These are paucity of infrastructure, which is the onus of the Government to address. Issues of roads, power, and common effluent treatment plant could be addressed with creation of pharma clusters. Particularly, the API industry is bogged down by the problems of handling effluents. The industry also needs to face the increase in analytical costs driven by investments in sophisticated instruments such as LCMS, NMR, ICP-OES, X-Ray diffraction etc. Now the government will have to provide tax exemptions.
Fourth challenge is education or training, where the academia and industry should team-up to develop competent work force. There is a need for more finishing schools to train personnel on quality assurance and regulatory compliance.
Fifth challenge is to regain our standing in global market as international regulators are concerned over our double standards. We have to take a re-look at and Drugs & Cosmetics Act. To begin with, for API manufacturing , we should adopt ICH Q7 standards which help build trust among the importing countries.
Barring the state drugs control offices of Gujarat, Maharashtra, Karnataka which have computerized all operations , other states need to follow at a faster pace. The API industry is dependent on approvals for using rectified spirit, methanol etc. The Government must simplify formalities for genuine users because for exporter such delays even by a day are critical.
In a phase of stringent global inspection, what is your advice to APIs companies?
In the last one decade, the industry is going through turmoil with increased regulatory expectations leading to frequent questions during review of dossiers and inspection on product design, Critical Quality Attributes (CQA), Critical Process Parameters (CPP), Critical Material Attributes(CMA), justification of scale-up process etc. A string of warning letters came in because of inadequate processes, lack of laboratory systems and improper utilization of corrective and preventive action (CAPA) which resulted in a trust deficit. In this situation, my advice for API manufacturers would be move towards excellence in operation and quality.
The roadmap for the future is to focus on process design, set aside more time on each task including R&D which would enable resolving any issue during the product life cycle. There is need to adopt ICH Q11 for development and manufacture of drugs, use quality systems as a knowledge management tool.
Managements should be involved every process, conduct review meetings, comprehend issues to resolve crisis and insist on putting ‘learning’s to practice’. It should encourage continuous improvement and work beyond compliance.
If Indian pharma industry adheres to quality assurance and operational excellence, it would regain its trust among international regulators and gain a leadership status globally.