indian pharma - an overview by idma secretary general daara b patel

AFFORDABLE EFFICACIOUS MEDICINES

ALL ROADS LEAD TO INDIA

INDIAN DRUG MANUFACTURERS’ ASSOCIATION

(IDMA)

DAARA B PATEL

SECRETARY - GENERAL

4TH SINO-INDIA FORUM: FINISHED DRUGS EXPORT

China, 14th November 2013

IDMA’s HQ

80 % Pharma

Corporate Office

are located

2

INDIAN DRUG MANUFACTURERS’ ASSOCIATION

Founded in 1961 – now in 52nd year of service as premier Association of the Indian Pharma Industry

Regarded in Government, Media & Industry Circles as the ‘Voice of the National Sector’

6 Region-wise State Boards

19 Sub-Committees, headed by Experts

Membership Strength – over 700 Members

Publications: IDMA Bulletin (Weekly), Indian Drugs (Monthly) & Annual Publication

Awards presented on Annual Day for Quality Excellence, Best Patents, Quality Research,

At IDMA- PAC Awards for Eminent Analyst, Outstanding Analyst,

Young Analyst

Seminars/ Workshops on Regulatory, Technical, Medical affairs, Harmonization projects with US FDA, IP, USP, EDQM, ANVISA

3

IDMA GOING GLOBAL

• IDMA is in talks with leading Associations and

Organisations globally for closer Co-operation and

Networking on International issues concerning the

Pharmaceutical Industry and has signed MOUs with :

IDMA-CPIA (China Pharmaceutical Industry

Association)

IDMA-KPMA (Korean Pharmaceutical Manufacturers

Assn)

IDMA-Dubiotech (Dubai Biotechnology Park)

IDMA-ABLE (Assn. of Biotechnology Led

Enterprises)

IDMA- Pro Genericos - Brazil (in discussion)

4

IDMA GOING GLOBAL (contd…)

• Active participation in International Fora:

IGPA Conference, Canada

USP Convention, Washington

API China Spring, Harbin

Propak Asia, Bangkok

2nd Annual Pharma Manufacturing China

Summit, Shanghai

Generics R&D & Partnering Asia, Shanghai

India-Japan Pharma Industry Seminar, Osaka

International Pharmaceutical Ingredients

Expo & Conference, Japan

Sino-India Forums

5

DEMAND DRIVERS

6

Accessibility Over USD 200 Billion to be spent on

medical infrastructure in the next

decade

New business models expected

to penetrate tier-2 and tier-3 cities

Over 160,000 hospital beds expected

to be added each year in the next

decade

Increasing access to lower-income

segments due to Government

initiatives that increase access and

affordability (e.g. RSBY)

Acceptability Rising levels of education to increase the

acceptability of pharmaceuticals

Patients to show greater propensity to self-

medicate, boosting the OTC market

Acceptable of biologics and preventive

medicines to rise

Vaccine market could grow 20 per cent per year

in the next decade

Surge in medical tourism due to increased

patient inflow from other countries

Affordability Rising income could drive 73 millions households

to the middle class over the next 10 years

Over 650 million people expected to be covered

by Health Insurance by 2020

Government-sponsored programmes set to

provide health benefits to over 380 million BPL

people by 2017

By 2017, the Government plans to provide free

generic medicines to half the population at an

estimated cost of USD 5.4 billion

Epidemiological Factors Patient pool expected to increase over 20% in the

next 10 years, mainly due to rise in population

New diseases and lifestyle changes to boost

demand

Increasing prevalence of lifestyle diseases

EVOLUTION OF INDIAN PHARMA INDUSTRY

7

GROWTH IN PURCHASING POWER

8

INDIAN PHARMA INC Knowledge based Industry and one of the

world's largest and most developed.

Current turnover estimated at US$ 25 bln. growing

@ 12%

About 300 Large & over 10,000 SMEs

About 77% units make Formulations and about 23%

units make APIs

Over 64,000 formulations in market covering almost

every therapeutic segment with about 10 to 200

brands per molecule

For example, Ciprofloxacin has over 180 brands and

Atorvastatin has about 96 brands competing in the

market.

9

INDIAN PHARMA INC (contd…)

Medicines constitute only about 15% of total

healthcare spend in India

About 90% of India’s pharmaceutical market is

made up of branded generics and has the potential

to grow at an accelerated 15 to 20% CAGR in the

next five years.

Patented drugs account for 1% of $12 bln. market,

set to grow to 5% of est. $ 50-60 bln. market by 2020

Globally ranks 4th largest in volume and 12th in

value

10% of World’s Production but 1.5% of Value

(Extremely Competitive Prices)

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SHARE OF GENERIC AND PATENTED

DRUGS IN INDIAN MARKET

11

By 2016, share of generics may be about 90% of Indian pharma market, as patented drugs increase to about 10%

FORMULATION EXPORTS

12

($ bio)


India’s five of the largest export markets are

USA, UK, Germany, Russia and South Africa

Three out of Global Top 10 fastest growing

generic companies are Indian - Glenmark, Dr

Reddy’s and Sun Pharma

The Indian pharma market is expected to grow

at 12–15 % over next two years

The Indian drugs and pharma sector attracted

FDI worth US$ 9.6 bln. between April 2000 to

May 2012

13

• India is now among the top five pharma

emerging markets globally

• Front runner in a wide range of specialties

involving complex drugs' manufacture,

development and technology

• Expected to touch $36 bln. by 2016

• India has about 40% of all ANDA approvals

from US FDA during January-July 2013.

• USFDA approvals speak about the stringent

norms followed by the Indian companies 14



Exports at $12 bln. with formulations at

$ 7.5 bln. and APIs at $ 4.5 bln.

Exports estimated to cross $16 bln. by

2013-14

Exports to almost all countries, with major

share in regulated markets

Rated world’s single largest producer and

top exporter of generic drugs

Every Third Tablet consumed in the World

is ‘Made in India’ 15

INDIA’S API INDUSTRY

16

The Indian API Industry services the Domestic and

International Market

The Indian API manufacturing industry is the third largest

in the world, to grow at CAGR 17% over 2011-17

Producing over 400 APIs

Growth in Generic Industry spurred API demand worldwide

Increased emphasis of contract manufacturing increases

scope of captive API demand

High percentage of API exports are high value, servicing

Highly regulated markets with complex APIs

Globally Indian companies hold more than 90% of APIs

approvals for ARVs, Anti-TBs and Anti-malarials

RECENT COLLABORATIONS WITH INDIAN COs

MNC INDIAN THE DEAL FROM RATIONALE

Mylan Labs,

USA

Matrix labs

71.5% August

2006

Expand mfgr

platform, Access

to key markets

Daiichi Sankyo,

Japan

Ranbaxy Acquired June 2008 Access to low cost

manufacturing

Pfizer, USA Aurobindo Contract

Manufacturing

March

2009

60 products for

regulated markets

Fresenius Kabi,

Germany

Dabur Acquired April 2009 Access to

oncology

manufacturing

Pfizer, USA Claris

Lifesciences

Contract

Manufacturing

May 2009 Access to sterile

injectable drugs

GSK, UK Dr Reddy’s Partnership June 2009 Develop & market

select products for

emerging markets

17



Mylan Labs, US Biocon

Contract mfgr & dev. June 2009

Develop monoclonal

antibody

Mylan

Labs,USA

Famy

Care

15% stake August

2009

Access to oral

contraceptive mfg.

Sanofi Pasteur,

France

Shantha

Biotech.

Controlling stake August

2009

Access to vaccine

manufacturing

Hospira Orchid

Chem.

Buyout of injectable

antibiotics

Dec 2009 Access to low cost

manufacturing

Pfizer, USA Strides Collaboration Jan 2010 &

May 2010

Access to 78

oncology products &

sterile injectables

Reckitt

Benckister, UK

Paras

Pharma

Takeover March

2010

Access to OTC

market

Abbott Labs,

USA

Nicholas

Piramal

Takeover of

healthcare business

May 2010 Access to generic

products

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Pfizer , USA Vetnex Animal

Health

Controlling

stake

June 2009 Access to animal

health business

Vetoquinol,

France

Wockhardt (vet

division)

Buyout June 2009 Access to Indian

market

Abbott Lab.,

USA

Wockhardt

(nutrition Div)

buyout July 2009 Access to Indian

nutrition market

Reckitt

Benckister, UK

Paras Pharma Takeover March

2010

Access to OTC

market

Litha ealth-

care,South

Africa

Natco Pharma Marketing

of products

Sept 2011 Access to multitude of

dossiers

B. Braun

Singapore

Ahlcon

Parenterals(I)

Controlling

stake

March

2012

Iv Fluid and medical

disposals

Mylan Inc, USA Strides Arcolab

(Agila

Specilaities)

Buyout Sept 2013 Injectables catering to

oncology

19

TOP INDIAN M&A SECTORS

20

Others 18%

Manufacturing 4%

IT & ITES 4%

Banking & Financial Services

4%

Power & Energy 5%

Cement 6%

Pharma, Healthcare & Biotech

11%

Oil & Gas 21%

FMCG, Food & Beverages

14%

Automotive 13%

INTERNATIONAL REGULATORY APPROVALS

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No. of manufacturing sites (APIs + formulations) registered /

approved by US FDA (as on 31-3-2013)

550 / 323

Total no. of DMFs filed from India as on 31-3-2013 > 3000

No. of ANDAs final / tentative approvals received from USFDA in

Year 2012

178 / 42

No. of ANDAs final / tentative approved by US FDA between

Jan-June 2013

87 / 25

No. of CEPs (certificates of suitability) from EDQM received by

130 companies

902

No. of sites approved by PDMA (Japan) – 20% of all PDMA

aprrovals

>190

WHO GMP certified plants > 800

Australian TGA approvals 845

R&D Investment in India

• R&D investments overall is approx 18% of

revenue

• Spending on R&D by 30 leading Indian pharma

companies up significantly by 19.7% during the

year ended March 2013 over the previous year.

• Focus of R&D by these companies is on new cost

effective generic products in key therapeutic

areas

• With higher spending on R&D, Indian Pharma Inc.

is set to tap upcoming opportunities from loss of

patent exclusivity in the coming years.

(Improve / Add Value to generics / patented products) 22

R&D Investment in India

• Net outcome of this trend is higher

approvals for ANDAs and DMFs from

highly regulated authorities like US, Europe

and Japan.

• Major companies like Shasun Pharma,

Unichem Lab., Biocon, Natco Pharma etc

have pushed their R&D expenses over 50%

during 2012-13

• For example, R&D expenditure of Shasun

Pharma went up by 179%

23

FOCUSSED APPROACH

• Designing products specifically for low

income group

• Identifying and servicing completely new

needs

• Focusing on New Drug Delivery Systems

• Greater focus on prevention rather than

treatment, including increasing use of

information and communication

technologies

24

INDIAN BIOTECHNOLOGY MARKET

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Indian Biotech Market at $ 4.3 bln. expected to touch $ 11.6 bln. by 2017

Global Biotech Revenue

$262 billion

INDIAN BIOTECH SET-UP

• World's largest producer of vaccines: 60% of the world’s

vaccines are manufactured in India – exported to over 150

countries - accounts for 60–80% of annual UN vaccine purchases

• Over 300 companies in operation

• Among the five rising biotech industries in Asia-Pacific

• Annual revenue generated is over $4 bln at a growth rate of

21.5%

• Revenue from biotech exports at $ 2.2 bln in 2013 accounting

for 51% of total industry revenues

• Genome Valley project at Hyderabad is the largest single cluster

for biotech research, training and manufacturing, earns foreign

exchange of over $ 1 bln per year

26

India's growing respect and

legal / regulatory framework

for IPR, favourable economic

policies and availability of

huge talent pool for sustaining

and growing operations is

making India an attractive

choice for global pharma

companies for investment, tie-

ups, mergers, acquisitions.

THE INDIAN SCENARIO

27

Because of patent expirations

of blockbuster drugs, Indian

firms are expected to actively

participate in the production of

generic version of these

products. Indian companies are

also ready with generic version

of biotech drugs. Therefore,

India will be able to maintain a

large basket of qualitty

affordable generics with

assured safety and efficacy.

THE INDIAN SCENARIO

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GLOBAL HEALTHCARE COSTS

Rapid hike in prices

Overall economic slowdown

Rising Govt. deficit

Reduction in Healthcare budgets

High priced prescription drugs

Aging population

Administrative costs

Spending on chronic diseases etc

Companies forced to reduce prices

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Declining Productivity

Competitive Pressure

Reducing drug approvals

Stringent regulations

Implementation of cost control

measures by Governments

Increasing development costs

Increase in Clinical trial period due to

tightened drug safety regulations

- thereby Leading to higher development costs and increased time-to-market

INDUSTRY’S CHALLENGES

30

31

GLOBAL PHARMA MARKET

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GLOBAL PHARMA TRENDS

• Spending on medicines will reach $1.2 trn. by 2016 • Rising influence of healthcare access and funding World

over is driving demand towards low cost generic options

from India

• Anti-Diabetic Drugs and those for cardiovascular

diseases are expected to see the fastest growth.

• Cardiovascular patients estimated globally at over 250

million, mainly due to changes in demographics and

lifestyle

• Pharmaceutical industry's R&D programs will need to

adjust to broad availability of low-cost generics from

India

• Demand for generics will also increase in oncology,

diabetes, multiple sclerosis and HIV therapy areas

Globally, Governments and pharma companies are

looking at opportunities to procure medicines at

affordable prices, reduce costs, improve pipeline

and reduce the time-to-market

To reduce healthcare costs, they are adopting

strategies like:

SOURCING FROM INDIA

Outsourcing (manufacturing, research, Clinical

Trials etc) to India

Restructuring their R&D models to consider

generics

Adopting efficient sales & marketing functions to

promote ‘value-added’ generics as alternatives

In-Licencing Arrangements

WHAT IS THE SOLUTION?

33

ADVANTAGE INDIA

34

ADVANTAGE INDIA

• While clinical trials cost approximately $300 to 350 million in

US, they cost only about $25 million in India

• India has the 2nd highest number of qualified doctors in the

world. Of every six medical doctors in the US, one is Indian

• Investigational New Drug stage costs about $100 to 150

million in US, but costs only around $10 to 15 million in India

• 700,000 science and engineering graduates & 1500 PhDs

qualify annually. Over 15,000 scientists

• India’s huge population and the prevalence of a wide

spectrum of disease conditions offer a wide patient-resource

for clinical trials

35

• India manufactures and exports medicines from all therapeutics groups.

• Many original innovator companies source their discovered drugs from Indian companies.

• India is a world leader in anti-AIDS and anti-TB segments and for some of the latest medicines like Glitazones, Celecoxib, Statins, Montelukast and many anti-cancer drugs

ADVANTAGE INDIA

On demand

36

US PATENT EXPIRIES

37

Year No. of

Patents

Year No. of

Patents

2010 70 2020 171

2011 130 2021 133

2012 165 2022 88

2013 207 2023 95

2014 253 2024 64

2015 235 2025 45

2016 162 2026 37

2017 203 2027 42

2018 209 2028 21

2019 2013 2029 22

(Source: USFDA Orange Book, Oct 2011)

GLOBAL RECOGNITION

• Bill Clinton's foundation, Clinton Health Access Initiative (CHAI) got further discounts from Indian generic manufacturers that reduced the cost of combination drug treatments for AIDS, which can reach thousands of dollars per year in the West, to as low as $120 a year per patient.

• Many Indian companies are part of this agreement where Lamivudine, Stavudine, Zidovudine, Nevirapine will be supplied to a few African countries.

• India has highest number of approvals from the US President's Emergency Plan for AIDS Relief (PEPFAR).

38

INDIA AS PHARMACY OF

DEVELOPING WORLD – Examples

• Main procurement agencies for

developing countries depend

overwhelmingly on India

• 70-90% of essential medicines of

developing countries comes from India

• 50% of medicines procured by UNICEF

for developing countries are from India

• 75-80% of medicines distributed by

Dutch-based International Dispensary

Association (IDA) Foundation, the chief

medical supplier to developing

countries is sourced from India

40


DEVELOPING WORLD – Examples (contd….)

• 80% of medicines for AIDS issued by MSF

(Doctors Without Borders) come from

India and are distributed in treatment

projects in over 30 countries

• Globally, 70% of treatment for 87

countries provided by UNICEF, The Global

Fund to Fight AIDS, Tuberculosis and

Malaria, the Clinton Foundation, etc. come

from India

• 91% of the generic ARVs approved by the

US FDA for PEPFAR, the US President’s

AIDS initiative for distribution in

developing countries are from India,

resulting in cost-savings up to 90%.

41


DEVELOPING WORLD – Examples (contd….)

• In Zimbabwe, 75% of all tenders for

medical expenditure come from India

• In Lesotho, it is 95%

• 90% of the ARVs used in Zimbabwe’s

national treatment programme come from

India

• In addition, raw materials are exported

from India to other countries for local

production of affordable medicines

• This has been crucial to enable national

AIDS programmes, such as those in Brazil

or Thailand, to provide universal free

access to ARVs.

• Thailand gets 90% of its raw materials for

ARV production from India

42

INDIA’S SUPPORT TO USA

• Over 40% of generics prescribed are from India

• To ensure continued supply of the low cost quality generics

from India, the US FDA has opened India office

• 1 out of 5 US FDA inspections for approvals are in India

• Indian firms have over 40% of total ANDA approvals in USA

• 80% of all retail prescriptions filled in USA are for generic

drugs

• Based on their marketing and distribution networks and

manufacturing capacities, Indian firms could see as much as

15-28% annual growth from the US, predict experts.

• To overcome the recent shortage of cancer drugs J & J’s

Doxil in USA, the US FDA sought Sun Pharma’s help in

providing their chemotherapeutic drug Lipodox drugs from

India

43

LARGEST SUPPLIER TO UNICEF

44

• India has consistently been the largest

supplier to UNICEF since 2007.

• India was the largest supplier country in

2012, with $558 million worth of supplies

such as vaccines, pharmaceuticals,

nutrition, medical supplies

• Of the 2.14 bln. purchases by UNICEF in

2012, more than 25% were from India

• Serum Institute of India Ltd., an IDMA

Member supplied vaccines / biologicals

worth $254 mio dollars, making it the

largest supplier in India

• Other significant suppliers include Hetero

Labs, Ranbaxy Labs, Aurobindo Pharma,

Haffkine Bio-Pharma Corp., Micro Labs etc,

all Members of IDMA.

45

LARGEST SUPPLIER TO UNICEF

• UNICEF has recognised India's contribution to glocal

aid, and international groups have lauded India's role

in increasing access to medicines in the developing

world.

• Anti RetroViral (ARV) treatment in Europe was

$10,000 per patient a year, until Indian manufactured

drugs brought it down to $95 patient a year.

• India is not only the largest supplier to UN groups,

but also to the MSF and International Dispensary

Association.

Affordable Efficacious Medicines –

All Roads Lead

• India happens to be the largest supplier of generic

ARVs to low and middle income countries.

• Paul Cawthome (MSF Access Campaign

Coordinator-Asia) highlighted the worldwide

dependency on India as a drug supplier best, when

he said : 'It comes as a great relief to millions around

the world who depend on a continuous supply of

Indian generic medicines that the Indian Supreme

Court has ruled against Novartis.‘

• To meet increasing global requirements, the

Government of India has set a target of $25 bln. for

pharmaceutical exports by 2016.

46

Affordable Efficacious Medicines –

All Roads Lead to India

• Over 100 countries, mostly in the

developing world, depend on India for

affordable and quality essential medicines,

vaccines and medical supplies

• Every fifth generic drug and every third

HIV drug consumed anywhere in the

world, mostly in the developing world,

home to over 80 % of the world's

population, is manufactured in India

47

CHINDIA BILATERAL TRADE

• China’s Premier Li Keqiang chose India for his first

foreign trip

• Premier Li was confident that “we are not a threat to

each other, nor do we seek to contain each other”

• Prime Minister Manmohan Singh had earlier assured

China that “the world is big enough for both countries

and each is too big to be contained by the other“

• China has emerged as India’s largest trading partner as it

replaced the US (in March 2008)

• Premier Li has assured that China’s markets will be

opened to Indian products to address the trade

imbalance and boost commerce to $100 billion a year

48

• Despite a clear value proposition,

Indian companies find it difficult to win

government procurement contracts due

to regulations that favour Chinese

companies.

• Again, China accounts for nearly 73%

of Indian imports of APIs and other

organic compounds.

49

CHINDIA BILATERAL TRADE

• As a reciprocal measure, China should

import drug formulations from India to offset

the trade deficit against API imports and set

a timeline for review and approval of drug

dossiers

• India’s closer engagement with China in the

global production network could be a

possible way to improve its technology-

intensive exports.

• Our trade must focus on ‘trade creation’ and

‘trade diversion’

50

CHINDIA - PARTNERSHIP IN

GLOBAL TENDERING

IN CONCLUSION

A Win-Win situation!! IDMA has always promoted access to quality affordable medicines, as our

Annual themes confirm:

Affordable Medicines for All (2003)

Indian Pharmaceutical Industry – Going Global (2004)

People First… Patents Next (2005)

Global Pharma, India has Arrived (2006)

Contract Research and Manufacturing Services -Destination India (2007)

Indian Pharmaceutical Industry – Exciting Times Ahead (2008)

India’s Quality Affordable Generics: For Global Healthcare (2009)

India- The Generics Pharma Capital of the World (2010)

Healthcare Of People – Always In All Ways (2011)

INDIAN PHARMA INC. CREATING A GLOBAL IMPACT (2012)

AFFORDABLE EFFICACIOUS MEDICINES – ALL ROADS

LEAD TO INDIA (2013) 51

Thank You

Xiexie

52

indian pharma - an overview by idma secretary general daara b patel

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