PHARMACEUTICALS

Overview of Pharmaceutical Sector

During the current year 2009-10, Pharma was among the few sectors that managed to expand its revenues despite global recession and financial crises.Strong domestic demand, growing preference for generics worldwide and favourable rupee-dollar exchange rate helped the Indian Pharmaceutical sector. Aggregate income of the drugs and pharmaceuticals companies for the first two quarters of the current year grew by 13 per cent and 7.8 percent respectively as compared to previous year. As per Centre for Monitoring Indian Economy (CMIE) ,the estimated growth in aggregate income for the next two quarters is 9.5 per cent and 10.2 percent respectively.

The Indian pharmaceuticals industry has grown from a mere US$ 0.32 billion turnover in 1980 to approximately US$ 21.26 billion in 2009-10.The country now ranks 3rd in terms of volume of production (10% of global share) and 14th largest by value.

Growth of Indian Pharmacetical Industry from 2002-03 to 2008-09 are given in table below:

Source:Annual Report 2008-09,Department of Pharmaceuticals,Government of India

Exports

India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs), Bio-Pharmaceuticals, Clinical Services to various parts of the world.

Export of drugs and pharmaceuticals from 2002-03 to 2009-10 (May,09) are given in table below:

Source: Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

The domestic Pharma Industry

The domestic Pharma Industry has recently achieved some historic milestones through a leadership position and global presence as a world class cost effective generic drugs' manufacturer of AIDS medicines. Many Indian companies are part of an agreement where major AIDS drugs based on Lamivudine, Stavudine, Zidovudine, Nevirapine will be supplied to Mozambique, Rwanda, South Africa and Tanzania which have about 33% of all people living with AIDS in Africa. Yet another US Scheme envisages sourcing Anti Retrovirals from some Indian companies whose products are already US FDA approved.

Many Indian companies maintain highest standards in Purity, Stability and International Safety, Health and Environmental (SHE) protection in production and supply of bulk drugs even to some innovator companies. This speaks of the high quality standards maintained by a large number of Indian Pharma companies as these bulk actives are used by the buyer companies in manufacture of dosage forms which are again subjected to stringent assessment by various regulatory authorities in the importing countries. More of Indian companies are now seeking regulatory approvals in USA in specialized segments like Anti-infectives, Cardiovasculars, CNS group. Along with Brazil & PR China, India has carved a niche for itself by being a top generic Pharma player.

Increasing number of Indian pharmaceutical companies have been getting international regulatory approvals for their plants from agencies like USFDA (USA), MHRA (UK), TGA (Australia), MCC (South Africa), Health Canada etc. India has the largest number of USFDA - approved plants for generic manufacture. Considering that the pharmaceutical industry involves sophisticated technology and stringent "Good Manufacturing Practice (GMP) requirements, major share of Indian Pharma exports going to highly developed western countries bears testimony to not only the excellent quality of Indian pharmaceuticals but also its price competitiveness. More than 50% share of exports is by way of dosage forms. Indian companies are now seeking more Abbreviated New Drug Approvals (ANDAs) in USA in specialized segments like anti-infective, cardio vascular and central nervous system groups.

Exports

The Domestic pharma sector has been expanding and has is estimated at US$ 11.72 billion (Rs 55454 crore) in 2008-09 from US$ 6.88 billion (Rs 32575 crore) in 2003-04. Indian exports are destined to various countries around the globe including highly regulated markets of USA, Europe, Japan and Australia.

Export of domestic drugs and pharmaceuticals from 2003-04 to 2008-09 are given in table below:

Source: Annual Report 2009-10,Department of Pharmaceuticals,Government of India

Pharma Export Promotion Council (Pharmexcil)

The Department had played a pivotal role in the formation of Pharmexcil consequent to the recommendation from 9th Five YearAnnual Plan Working Group Report on Drugs and Pharmaceuticals. In the light of this, the Department constantly interacts with Pharmexcil in their work areas. The role of Pharmexcil is for facilitation of exports of Drugs, Pharmaceuticals, Biotechnology products, Herbal medicines and Diagnostics, to name a few.It is authorized to issue Registration-cum-Membership Certificate (RCMC) which is one of the requirements for the importers and exporters of commodities. In addition to this, Pharmexcil is concerned with giving export thrust to the various products through visits of delegations to various markets abroad, organizing of seminars, workshops and exhibitions.As a major area of work, Pharmexcil also holds Buyers/Sellers meets and compiles detailed data base on pharma exports and problems in exporting pharma group products of Pharmaceuticals.

Key Strengths of Pharma Sector

• Low cost of innovation/Manufacturing/Capex costs/expenditure to run a cGMP compliance facility.
  
  
• Low cost scientific pool on shop floor leading to high quality documentation.
  
  
• Proven track record in design of high tech manufacturing facilities.
  
  
• Excellent regulatory compliance capabilities for operating these assets.
  
  
• Recent success track record in circumventing API/formulation patents.
  
  
• About 95% of the domestic requirement being met through domestic production.
  
  
• India is regarded as a high-quality and skilled producer in the world.
  
  
• It is not only an API and formulation manufacturing base, but also as an emerging hub for:
  ­ Contract research
  ­ Bio-technology
  ­ Clinical trials and
  ­ Clinical data management.
  
  
• The country has the distinction of providing quality healthcare at affordable prices.
  

Top 20 destinations of Indian Pharma products during 2008-09

Source: Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

Research and Development

In no other Industry segment innovative R&D is as critical as in Pharma industry. Here, the New Drug Discovery Research (NDDR) has to keep pace with the emerging pattern of diseases as well as responses in managing existing diseases where target organisms are becoming resistant to existing drugs. The NDDR is also an expensive activity. It is encouraging to observe that at least 10 Indian companies are into new drug discovery in the areas of infections, metabolic disorders like diabetes, inflammation, respiratory, obesity & cancer. Most of these companies have increased their R&D spending to over 5% of their respective sales turnovers. There is notable success from some Indian companies in out licensing new molecules in the asthma and diabetes segments to foreign companies. Introduction of Product Patent for Pharmaceuticals is an important feature for Indian Pharma R&D scenario. This has boosted the confidence of MNC Pharma companies in India where a number of western Pharma companies have already R&D collaborations with Indian Pharma companies in the field of NDDR. Some Indian companies have also got US-FDA approvals for their new molecules as Innovative New Drugs (lND).

Western Pharma companies have recognized the attractiveness of India as a R&D outsourcing destination due to low cost scientific manpower, excellent infrastructure, top quality with capability to conduct modern research under GLP, GCP guidelines. Many of them have set up independent R&D centres in India.

Clinical Trials to establish safety and efficacy of drugs constitute nearly 70% of R&D costs. Considering the low cost of Research and Development in India, several MNC Pharma companies as well as global Clinical Research Organizations are increasingly making India a clinical research hub. In conclusion new drug discovery in India has made a promising start wherein at least five to six potential candidates in the areas of Malaria, Obesity, Cancer, Diabetes and Infections are likely to reach Phase II clinical trials.

Many global pharmaceutical majors are looking to outsource manufacturing from Indian companies, which enjoy much lower costs (both capital and recurring) than their western counterparts. Many Indian companies have made their plants cGMP compliant and India is also having the largest number of USFDA-approved plants outside USA.

Indian companies are proving to be better at developing Active Pharmaceutical Ingredients (APIs) than their competitors from target markets and that too with non-infringing processes. Indian drugs are either entering in to strategic alliances with large generic companies in the world of off-patent molecules or entering in to contract manufacturing agreements with innovator companies for supplying complex under-patent molecules.

Some of the companies like Dishman Pharma, Divis Labs and Matrix Labs have been undertaking contract jobs for MNCs in the US and Europe. Even Shasun Chemicals, Strides Arcolabs, Jubilant Organosys, Orchid Pharmaceuticals and many other large Indian companies started undertaking contract manufacturing of APIs as part of their additional revenue stream. Top MNCs like Pfizer, Merck, GSK, Sanofi Aventis, Novartis, Teva etc. are largely depending on Indian companies for many of their APIs and intermediates.

International Co-operation/Export Promotion

An important focus area for the Department of Pharmaceuticals is of promotion of Indian pharma exports.The Department participated in the following International Cooperation events during 2009-10:-

• The fourth meeting of the India-EU Joint Working Group on Pharmaceuticals and Biotechnology was held in the month (September, 2009 at New Delhi under the Co- chairmanship of Shri Arun Jha, Joint Secretary (Pharma).
  
  
• Participation in the BIO 2009, held in May, 2009 in USA.
  
  
• Participation in the India-USA HTCG, held in May, 2009 on the margins of BIO 2009.
  
  
• Organization of Brand India -Indian Pharma Expo in Myanmar from 12-14 June, 2009.
  
  
• Participation in the 45th Annual Meeting of the DIA, held in June 2009 in San Diego, USA.
  
  
• Organization of India Pharma Summit 2009, on 30th September 2009 in Mumbai and celebration of India Day on 1st December, 2009 and CPhl 2009, held from 1st to 3rd December, 2009.
  
  
• Participation in the US-India Bio Pharma and Healthcare Summit which was held in Boston on 14-15 May, 2009.
  
  
• Visit of Nigerian delegation led by DG, National Agency for Food & Drug Administration & Control to India in connection with wrong labeling of generic drugs as being of Indian origin even while not being actually made in India.

Department of Pharmaceuticals also provided financial assistance for following activities, for promotion and development of the sector:

• Publishing of advertisement in Kazakh journal "Ghazab Hindustan" for promotion of Indian Pharma products in Kazakhstan.
  
  
• Conducting of Pre-feasibility study for development of a Greenfield Project for Medical Devices Cluster in Gujarat and a Brownfield Project for Bulk Drugs Cluster in Andhra Pradesh.
  
  
• Presentation of Patent Awards on the eve of Indo-Africa Pharma Business Meet.
  
  
• Preparation of Film on Pharma Industry in India.
  

Major Pharmaceutical Public Sector Undertakings

• Indian Drugs & Pharmaceuticals Limited (IDPL)
• Hindustan Antibiotics Limited (HAL)
• Bengal Chemicals & Pharmaceuticals Limited (BCPL)
• Rajasthan Drugs and Pharmaceuticals Ltd. (RDPL)
• Karnataka Antibiotics & Pharmaceuticals Ltd. (KAPL)

Major Pharmaceuticals Industries in India

• Aurobindo Pharma Ltd
• Aventis Pharma Ltd
• Cadila Pharmaceuticals Ltd
• Cipla Ltd
• Dabur Pharma Ltd
• Dey's Medical Stores Mfg. Ltd
• Dr. Reddy's Laboratories Ltd
• Elder Pharmaceuticals Ltd
• Glenmark Pharmaceuticals Ltd
• Glaxo SmithKline Pharmaceuticals Ltd
• Lupin Ltd
• Merck Ltd, India
  
• Piramal Health Care
  
• Novartis India
  
• Pfizer Ltd
  
• Ranbaxy Laboratories Ltd
  
• Wockhardt Limited
  
• Wyeth Laboratories Ltd

Policy Framework

National Pharmaceuticals Policy, 2006 (.pdf)

Useful Web links

Department of Pharmaceuticals: http://pharmaceuticals.gov.in/