The incessant march of the home grown pharmaceutical companies of India in search of excellence, especially in the space of high quality low cost generic medicines for almost all disease areas, continues at a scorching space, probably more than ever before.
It has been recently reported that among the top 10 fastest-growing generic companies globally, three are now from India with Sagent Pharma of the U.S topping the league table. These ‘Crown Jewels’ of India are as follows:
|Company||Global rank||Growth %|
|Dr. Reddy’s Laboratories (DRL)||6||34|
In terms of country ranking, currently India is among the top 20 pharmaceutical exporting countries of the world. It exports high quality and very reasonably priced generic drugs to around 220 countries across the world, including highly regulated markets like USA and EU.
Today India contributes around 20 percent of the total volume of global generic formulations and has registered a CAGR of 21 percent between 2005 and 2011. It is, therefore, no wonder that India is popularly called ‘The Pharmacy of the Developing World’, despite many formidable challenges from various corners.
Focus on opportunities and less of moaning:
It is worth noting that Indian pharmaceutical players have been keeping their eyes on the ball always as they keep expanding their market access globally and do not seem to let go any opportunities untried, like:
- Large number of blockbuster drugs going off- patent
- Product portfolio strategy with many first-to-file products.
Unlike many others, these winners do not also seem to get engaged much in moaning, which could significantly dilute their operational focus.
Aiming the top:
Currently, more than a third of the Abbreviated New Drug Applications (ANDA) in the U.S is being filed by the domestic Indian players. Another industry estimate indicates that the Indian companies are filling on an average around 1000 ANDAs every year to reap a rich harvest out of the available opportunity, which will increase by manifold as about US$150 billion worth of drugs go off-patent between 2010 and 2015 as reported by the Crisil Research.
Similarly, India accounted for 45 percent in 2009 and 49 percent in 2010 of the total Drug Master Filing (DMF) for bulk drug in the US, which has reportedly increased to 51 percent in 2011.
The key trigger factor:
Experts opine that the reason for the domestic Indian pharmaceutical industry being able to be recognized as a global force to reckon with, especially in the generic pharma landscape, is due to the amendment of the Indian Patents Act in 1970 allowing only process patents for drugs and pharmaceuticals.
The Government of India had taken such a path-breaking decision in the 70’s to lay the foundation of a vibrant domestic pharmaceutical industry capable of manufacturing low cost and high quality modern medicines for the people of the country leveraging latest technology, including IT.
This decision was also directed towards creation of ‘drug security’ for the country as in the 70’s the country was very heavily dependent on drug imports and the domestic pharmaceutical industry was virtually non-existent.
The rich pay-off:
Though the country reverted to the product patent regime again in January 1, 2005, the critical mass that the home grown pharma industry had developed during almost thirty five years’ time in between, had catapulted India towards achieving today’s self-sufficiency in meeting the needs of affordable drugs for the ailing population of the country and perhaps including even those living beyond the shores of India.
The above ‘trigger factor’ has indeed paid a rich dividend to the country, by any yardstick. Currently India ranks third globally in terms of manufacturing of pharmaceutical products in volume.
Moreover, domestic pharmaceutical companies have now between themselves around 175 USFDA and approximately 90 UK-MHRA approved manufacturing units to cater to the needs of high quality and affordable pharma products across the world.
The Leading Indian Pharmaceutical ‘Crown Jewels’:
The following are the leading Indian Pharmaceutical players in terms of sales:
|Company||Sales in US $Mn||Year End|
|Ranbaxy Lab||5,687.33||December 2010|
|Dr Reddy’s Labs||5,285.80||March 2011|
|Sun Pharma||1,985.78||March 2011|
|Aurobindo Pharma||4,229.99||March 2011|
|Piramal Health||1,619.74||March 2011|
|Cadila Health||2,213.70||March 2011|
|Matrix Labs||1,894.30||March 2010|
(Source: India Biz News: April 13, 2012)
Domestic Indian pharmaceutical companies currently control not only over 75 percent of the total domestic market, but also export low cost and high quality drugs to over 220 countries, as mentioned above, including US, EU, Kenya, Malaysia, Nigeria, Russia, Singapore, South Africa, North Africa, Ukraine, Vietnam, and now Japan.
US accounts for 22 percent of the total Indian pharmaceutical exports, with Africa accounting for 16 percent and the Commonwealth of Independent States (CIS) eight percent, as reported by India Biz News: April 13, 2012.
Incessant growth story:
As reported by Dolat Capital, US generic market currently estimated at US $350 billion, is expected to grow by around 12 to13 per cent over 2011to15 period keeping the Indian pharmaceutical growth story intact, adding albeit more shin to it.
After the new healthcare reform brought in by President Barrack Obama, generic drugs now play a critical role in the US healthcare system, predominantly driven by the cost containment pressure of the government.
According to the Generic Pharmaceutical Association of US, generic medicines saved the healthcare system of the country over US$734 billion during 1999 to 2008 period. Expenditure on patented medicines being one of the fastest-growing components of healthcare costs, over a period of time, has now become a prime target for cost reduction by the US government.
‘The Guardian’ guards:
Some international experts do contemplate that potentially retarding global forces may attempt to cast their dark shadows over the well hyped ‘India Pharma Shining Story’ in the generic space of the industry from time to time, which needs to carefully guarded against and more importantly effectively negated.
In an interesting article, though in a different context, titled “Pharmaceutical companies putting health of world’s poor at risk: India makes cheap medicines for poor people around the world”, recently published in ‘The Guardian’, the author Hans Lofgren, an associate professor in politics at Deakin University, Melbourne articulates as follows:
“The EU, pharmaceutical firms and now the US are pressuring the ‘pharmacy of the developing world’ to change tack”.
Lofgren further commented: “We ought to be asking why governments in the rich world still seem happy to checkmate the lives of poor people to save their political skins. And why the pharmaceutical industry sees India as such a threat. Could it be that they detect the whiff of real competition?”
Be that as it may, after gaining the required critical mass, the shining story of the home grown pharmaceutical industry of India seems to be irreversible now, despite possible challenges as they will emerge.
Paying kudos to the pharmaceutical ‘Crown Jewels’ of India, many industry watchers feel that the global industry is now keener than ever before to take extra steps to keep the domestic pharma industry, enjoying a mind boggling over 75 percent share of the Indian Pharmaceutical Market, in the forefront and in a good humor to achieve their India objectives.
‘The Pharmacy of the Developing World’ should, therefore, continue to keep its eye on the ball keeping the flocks together and try to effectively translate it into the ‘The Pharmacy of the World’, as the global community keeps looking at this great transformation as a ‘miracle’ with much admiration and probably blended with a dash of awe and envy.
By: Tapan J Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.