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| Image adapted from: http://bit.ly/1epQQSm |
Global
Impact of India’s
Pharma Industry
Imagine a scenario where a life-saving
medicine for HIV/AIDS costs $12,000 a year, pushing it out of reach for most
patients who need it. Or a world where a rotavirus vaccine costs $9 per dose,
making it too expensive for most children across the globe.
Now, consider a reality where we
radically bring down the cost of these essential therapeutics. This has actually happened – in 2001 HIV
treatment was revolutionized by an Indian company CIPLA where a three-in-one
HIV/AIDS treatment was made available for a dollar a day. In 2013, Bharat Biotech, an Indian
manufacturer of a new rotavirus vaccine has pledged to sell it for $1 a dose, even
below the $2.50 per dose negotiated by the GAVI alliance.
India’s pharma industry has been
at the core of this public health revolution. By delivering high-quality
generics at the lowest cost, India
has become irreplaceable in delivering affordable access to healthcare – to the
world and to the US,
which is the largest market for generic medicines.
Drug manufacturers in India have brought
down the prices of a range of therapeutics — from vaccines for Hepatitis B, diphtheria,
polio and tetanus, to drugs for HIV, tuberculosis, diabetes and cancer — and saved
millions of lives in the process.
Indian generics account for
a 30% share of the US
market and are critical to President Obama’s affordable healthcare programme. Data
from the 2013 Generic Drug Savings in the US
report shows that generic pharmaceuticals saved the US health system and patients $217
billion in 2012 and a staggering $1.3 trillion dollars in the most recent
decade.
The Indian pharma industry’s impact
can be gauged from the following:
- It
accounts for 6% of the world's pharma industry in value and constitutes a
significant 25% in terms of volume
- With
over 60,000 generic brands across 60 therapeutic categories, India manufactures more than 400
different active pharmaceutical ingredients
- India is the largest global
exporter of generic medicines (in volume)
- It
exports vaccines to 150 countries and caters to 70% of the World Health Organization’s
demand for DPT and BCG and 90% of measles vaccines
- One
in three of the world’s children receive vaccines made in India
Bad
Medicine Or Bad Press?
Recently, the reputation of “The Pharmacy
to the World”, as the country’s drug industry is called, has been sullied.
Ranbaxy, Wockhardt, Sun Pharma and other manufacturers have been put on notice
by the USFDA. Some of their products were banned or recalled and some of their
processes red-flagged for non-compliance with current good manufacturing
practices (cGMPs).
These quality control issues – a few
major and mostly minor – have given rise to a lot of bad press which is
damaging India’s
reputation. While some of this taint can be justified due to irresponsible
actions of a few drug makers, it is evident that vested interests among global
pharma stakeholders are engaging in propaganda and alarmist reporting,
projecting the whole of India’s pharma
industry as having poor regulatory standards.
Even Margaret Hamburg, the
commissioner of the United States Food and Drug Administration, commented “recent
lapses in quality at a handful of
pharmaceutical firms” overshadowing the good manufacturing and quality process
of many Indian companies.
If there are a few errant
manufacturers in any country, would the entire industry of a country be
suspect? This would never be the case, but this is what is happening to India’s pharma
industry.
The world – and the US – needs to
understand that we are an integral partner in their affordable healthcare system.
While the US and Europe may
be among the largest producers of generics in terms of value, their products
lack the cost-efficiency that India
offers.
Let us understand what India can do to
blow away this black cloud of “bad quality” which hangs above our pharma
industry.
Our Quality Image –
Myths and Reality
The Indian pharma industry has built a
formidable position in the global market by leveraging its strengths. The
quality standards at India’s
pharma companies are already quite high, thanks in part to the industry’s
export thrust. According to Pharmexcil, over 55% of the country’s exports are
to highly regulated markets.
So what has happened to change this
situation in the recent past? Has our normally robust quality control system
become weak? Or are vested interests seeking to counter India’s
capabilities and market share — trying to block our industry through lobbying and
loaded claims?
1.
Greater The Share, More The
Scrutiny
As the India’s
market share in the US,
grows, it is only understandable that our exposure to US FDA scrutiny rises. Add
to that US FDA’s stricter compliance rules and procedures, and we can see why
there has been a sudden rise in alerts and notices.
India has 119 manufacturing
sites approved by the US FDA, the highest in any country outside of the US. According
to US FDA data, inspections of drug facilities in India rose to 195 in 2012 from 11
in 2002.
Domestic manufacturing facilities
received merely two import alerts in 2012. However, in 2013, 19 drug
manufacturing factories across India
were barred from supplying medicines to the US. In the same period, Chinese
drug manufacturing facilities faced seven FDA import alerts; Australian,
Canadian and Japanese companies two each; and South African and German units
one each. However, when viewed as a
percentage, the optics would favour India.
2.
We Are Not The Only Ones Picked,
But We’re Paying The Greatest Price
Pharma companies from other countries
have also been pulled up for non-compliance with quality control norms and
procedures. This is true not merely of companies outside the US,
but also of companies within the US.
From 2010 to June 2013, the US FDA has
issued warning letters to 66 companies. 12% of these companies were Indian. But
major global names – both generic manufacturers as well as innovators — figure
in that list of 66. These include Boehringer Ingelheim, Hospira, Merck, Novartis,
Genzyme, Sanofi Aventis, SmithKline Beecham, and Teva.
And the number of warning letters
issued has been growing each year: from 14 in 2010 to 19 in 2011 and 21 in
2012. Till June, 2013 there were 13 warning letters issued.
But nowhere except in India
is the entire industry being unfairly victimized for the actions of a few. Unfortunately the global media attention that
focuses on alerts or warning letters issued to Indian pharma companies fails to
reflect the reality that we are not the only country facing US FDA action.
3.
Minor Deviations In A Maze
Of Regulations
Understanding and navigating the
ever-changing and increasingly unforgiving regulatory scenario of Good
Manufacturing Practices (GMP), Good Clinical Practices (GCP) and Good Laboratory
Practices (GLP) in the pharma industry is extremely crucial. Even as these
regulations set a legal benchmark for high quality products, they set a
standard for exports that companies must meet if they seek to penetrate markets
abroad.
However, India
does not export to the US
alone. For example, the EU has endorsed 350 Indian manufacturing sites till
April 2013. Moreover, India
exports to countries across the world. The stakes are huge. India’s
pharmaceutical exports are poised to rise to about $20 billion by 2020.
There is no globally harmonized
standard of drug safety, efficacy and quality. Pharma companies face increasing
pressure to comply with a plethora of global regulatory standards across diverse
geographies. These standards keep changing as regulatory bodies make
requirements more stringent.
In such a situation, Indian pharma
companies, even when they try to adhere to all these varying standards, may
fall short of regulatory expectations in some cases.
The only incident of serious
regulatory non-compliance pertains to one company, Ranbaxy, and most regulatory
infractions pointed out by the regulators, fall within the realm of deviations
that reflect oversight or negligence.
With adequate attention and corrective
action, all errant Indian companies can quickly satisfy regulatory requirements.
India
already has high benchmarks in quality and this must be recognized.
Debunking the ‘Bad
Quality’ Myth
Our current troubles are a wake-up
call for the entire Indian pharma industry for collectively working to protect
our reputation and build our quality image through an action plan.
Exports have played a crucial role in
the growth story of the Indian pharma industry, and the US is one of
the biggest export markets for Indian generic drug makers. It is, therefore,
imperative to ensure that we set standards of quality and compliance for both
products and services that are on a par with the best in the world. In most
cases, these are already in place.
While one aspect of our action plan
needs to ensure compliance with regulations, the other prong of our attack must
effectively battle the unfair propaganda that the industry is facing. A crucial
component here is demonstrating — in the market and in media — that our pharma
industry is the keystone for delivering high quality, affordable medicines to
the world.
If Indian generics account for a 30%
share of the US
market by volume, this should translate into value as well. Given India’s
low-cost differentiator, this may not translate into value as in realization of
profits proportional to our share by volume. But this value certainly needs to be
rendered into a respect and recognition of India’s indispensability in driving
affordability across the global healthcare system.
An abridged version of this article appeared in The Economic Times on Tuesday, April 8th, 2014.
