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PROBLEMS AND PROSPECTUS OF PHARMACEUTICAL INDUSTRIES IN INDIA

Dr. A. Puratchikody

Drug Discovery and Development Research group


University College of engineering
Anna University, BIT Campus
Tiruchirappalli-620024
Generic drug status in India

71% Largest segment of the Indian pharmaceutical sector

largest global generic API merchant market, with a 7.2 per cent market
3rd share

2nd largest number of Abbreviated New Drug Applications (ANDAs)

DMF World’s leader in Drug Master Files (DMFs) applications

foreign direct investment worth US$ 15.57 billion between April 2000 –
FDI September 2017
Generic drug status in India

API More than 1600 API manufacturers operating in India & China

GlaxoSmithKline, Teva Active Pharmaceutical Ingredients


Leading API (TAPI), Dr. Reddy's Laboratories, Aurobindo, Lupine, Ipca,
manufacturers Cipla, Divi's Laboratories, Sandoz, Ranbaxy, Matrix, Sun
Pharma, BASF and Pfizer.
Research status in India

 The Government of India plans to set up a US$ 640 million


venture capital fund to boost drug discovery and strengthen
pharmaceutical infrastructure.
 The ‘Pharma Vision 2020’ by the government’s Department of
Pharmaceuticals aims to make India a major hub for end-to-end
drug discovery
 India’s existing knowledge capital in IT provides a natural base for
the development of bioinformatics research and operations.
 India has made considerable progress in stem cell research and is
well positioned to leverage growing capabilities in this area.
How Indian companies excel in exporting generic products to foreign Cost efficiency

33% Cost of production- 33 % lower than- US

50- Labor costs - 50–55 % cheaper than western countries


55%

40% Cost of setting up a production plant - 40% lower than in Western countries

Cost-efficiency - create opportunities for Indian companies


Skilled workforce -high managerial & technical competence in comparison to
its peers in Asia
India has the 2nd largest number of USFDA-approved manufacturing plants outside
2nd the US
India has 2,633 FDA-approved drug products. India has over 546 USFDA-approved company
FDA
sites, the highest number outside the US
How Indian companies excel in exporting generic products to foreign Cost efficiency

Leading pharma producer globally

3.1 Indian pharmaceutical sector accounts - 3.1 – 3.6 % of the global pharmaceutical
3.6% industry in value terms
10% 10 per cent in volume terms

$100 Expected to grow to US$ 100 billion by 2025

2nd largest share of pharmaceutical and biotech workforce in the world

Regulatory oversight is currently a barrier.

Overall costs - only 50% of comparable US-based programmes - should spur


50%
dramatic growth in clinical testing in the next 2-5 years.
Advantage India,

Indian pharma companies have solid expertise in contract manufacturing

Scrutiny around quality issues is driving significant improvement in manufacturing


standards & quality drugs.
Economic drivers

OTC sales are on the increase, offering opportunities to achieve high volumes and
enhance pharma brands in India.
Diversified portfolio

2008 Mergers and Acquisitions


Pharma sector in India more than double against the previous year, despite
the challenges posed by the global recession.
2015 Mergers and Acquisitions (M&A)
468 announced deals involving therapeutic drug assets, devices, diagnostics
and insurance companies,
Thomson Reuters Data
10% increase over 2014 and a 90% increase over 2012, .
Policy support

Pharma Vision 2020 making India a global leader in


2020 end-to-end drug manufacture

Reduced approval time for new facilities to boost


Boost
investments

100% FDI is allowed under automatic route


Problems

• Increased buying power and epidemiological changes should spur dramatic


growth in sales volumes, but India remains a price sensitive market.

• India’s healthcare system is struggling to meet the needs of its vast population
• Government programmes and reforms -improve the situation.

• Medical devices market- lacks the regulatory and R&D support necessary to
achieve its full potential and faces stiff competition from Europe and China.
Problems

• Practical issues
• Infrastructure deficits need to be addressed

• Intellectual property protection -improved substantially -but some holes remain


• Regulatory environment improved substantially - Industry still faces a number of
question marks.

• Government policies around drug price control, access to OTC drugs, tax policy,
Finalization intellectual property protection and infrastructure spending is still pending
Summary
Approach
-Call on India’s increasing expertise in biotechnology, bioinformatics and
clinical testing.
-Tap into the growing domestic market.

Foreign companies bringing newer products in India by - collaborative


networks across the value chain, from sourcing and manufacturing to
marketing and distribution.
Summary
 India’s pharma market is highly fragmented and remains extremely price sensitive.
 Affordable healthcare continues to pose a challenge,
- although there are a number of healthcare initiatives by the Government
underway to improve the situation for India’s vast population.
 Indian courts and regulatory authorities are very sensitive to pricing issues in
making decisions around intellectual property.
- Pharma companies coming into India - need to consider a differential pricing.
- They need to evaluate in future, access to medicines, a volume-based pricing
strategy -gradually increasing per capita incomes to come up with acceptable
price levels for their drugs
Summary
 Global pharma companies will then need to decide how to manufacture their
products, and identify and develop strong local partners.

Pharmaceutical business model


 witnessing a paradigm shift,
 moving from a fully integrated company structure towards a future where
companies use a wide range of outsourcing,
 Partnership initiatives and other contractual
 Relationship arrangements to create networks of collaboration and
discovery.

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