Going Beyond Generics
The generic business for Indian pharma companies has become very large, but now the industry is going through a series of challenges
Photo Credit : Umesh Goswami
From being a net importer of pharmaceutical products in the ’80s to the largest provider of generic drugs to global markets, the Indian pharma industry has come a long way. Currently, India supplies 20 per cent of global generic medicines in terms of volume, making it the largest generic medicine provider globally.
Over the last 15 years, Indian companies have done well in the generic business and built billion-dollar organisations on the back of generics R&D. An inherent strength that led to India’s strong growth was its chemistry skills. Another important point to note is that over the years, the US has become the largest market for Indian pharma, which contributes around $10-11 billion to the US generics market — valued at around $60 billion.
The generic business for Indian pharma companies has become very large, but now the industry is going through a series of challenges. The opportunities are dwindling because of the patent cliff, significant price erosion, consolidation at distributors’ level, increasing competition and increased regulatory scrutiny.
In the next five years, it will be imperative for the Indian generics industry to transition itself to a specialty/innovation player or a strong biosimilar organisation to drive growth and address several growth challenges. The four broad areas Indian pharma companies should focus on are specialty branded products, complex generics, biosimilars and the innovation business.
Specialty products are basically incremental innovation that gives you a certain exclusivity in the US market. It could be three to five years depending on the product. We, at Glenmark, have started work in the specialty area and are focused on respiratory as the therapy area. We already have two specialty assets, one is a combination product and the other a nebuliser. We have also ventured into biosimilars. Though we don’t have a major play on that front, we have one asset in the pipeline that fits with our global therapy area. It is a biosimilar of Zolair, which is currently a over $2-billion drug globally. The other area is complex generics, which are generic versions of complex injectables, inhalers, hormonal patches and rings, etc. Making generic versions of these products is extremely difficult in terms of R&D and the drugs have a long gestation period.
Finally, it’s innovation, an area that requires a large amount of capital and has a long gestational period, where Indian companies can truly transition their business from being generic to an innovation major. Novel molecular entities (NME) if commercialised, can transform patient lives and organisations. However, it takes a completely different level of expertise to discover and commercialise NMEs.
To move up in the value chain, we will have to focus and invest heavily on complex generics, specialty and differentiated products, and biosimilars. Though Indian pharma companies have a number of compounds in the R&D pipeline and in advanced stages of development, we are yet to reach our full potential in new drug discovery and development.
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