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Indian Pharma Sector: Time For A More Complex Game

With its cheap copies, India turned into the pharmacy of the world. But it’s time to move beyond exporting vanilla generics and on to manufacturing complex drugs

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Since independence, Indian pharma companies have brought great glory and unbridled optimism to the country. India conquered the whole world with its ‘cheap copies of patented drugs’ — an art that domestic medicine makers picked up long ago and that the domestic laws permitted as long as the production method was different from that used in the patented process. India is today known as the “pharmacy to the developed world.”

We began conquering…

After the economic liberalisation of 1991, pharma companies such as Ranbaxy, Dr. Reddy’s, Sun Pharma and Lupin entered the US generic market, which until then was dominated by Teva, Mylan, Actavis and Sandoz among others.

In 2001, Hyderabad-based Dr. Reddy’s generic version of anti-depression drug Prozac secured exclusive marketing rights in the US for a limited period, which turned out to be a great success. Cipla on the other hand, started manufacturing perfect copies of many of the world’s best and most important medicines. It sold drugs for AIDS in Africa at prices 20 to 30 times less than that of branded medicines. By 2008, Glenmark and Cadila too joined the generic rush. And by 2009, drug makers including Torrent, Alembic, Ajanta and Strides made a beeline for the world’s largest drug market, the US.

According to a report by domestic drug industry lobby Indian Pharmaceutical Alliance that cited data from the US Department of Commerce and the US Bureau of Census, pharmaceutical exports to the US jumped from $0.3 billion in 2005 to $5.9 billion in 2015.

The Road Ahead

Before India turns 100, the pharma industry needs to fix a great many shortcomings. The latest Gorakhpur tragedy  that witnessed the death of scores of children, reportedly due to lack of oxygen, has reminded us that mending gaps in the country’s healthcare system could save several lives.

“We need to work on getting freedom from the dependence on Chinese imports at the earliest,” says R.C. Juneja, CEO of Mankind Pharma. India imports over 85 per cent of active pharmaceuticals ingredient from China. “We need new age laws to rule the medicine market. The idea is to remove the ambiguity on regulations to monitor sales of drugs online, guidelines on electronic health records and laws to deal with clinical trials,” he adds.

The drug makers are still focusing largely on exporting vanilla generics across the globe. “The need of the hour is to invest more in research and development of complex generics,” says Sujay Shetty, Partner & Leader, Pharmaceuticals and Life Sciences, PwC India.

With increased scrutiny by foreign health regulators, the industry needs to do away with the culture of applying shortcuts.  “An attitude to not apply shortcuts, especially in manufacturing processes, will help us in reducing complaints raised by global health regulators,” says Karnataka Drugs & Pharmaceutical Association president Sunil Attavar.

For that to change, the pharma sector will, however, need clarifications in patent and legal regime. “There are several laws that require simplification and legal clarifications in order to create a level playing field for the industry,” says Hitesh Sharma, national leader for life sciences at consultancy firm EY.

Experts also expect the government to relax the unnecessary price controls and regulations. “Pricing policies without adequate consultations with the industry are not good and drug makers need freedom from uncertainties,” says Attavar.

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