Changing trends in

Indian Pharmaceutical Industry

- Rishang Deoras

Indian Pharmaceutical Evolution

Phase II

Government ControlDomestic Indian market- key driverIndian Patent Act –1970Drug prices cappedLocal companies begin to make an impact

Phase III Development Phase Bulk drug & formulation manufacturing

Process development

Production infrastructure creation

Export initiatives

Phase IV

Growth PhaseBulk drug exports to developing MarketsTRIPS agreement signed in 1995

Rapid expansion of domestic market

International market development

Research orientation

Phase V

Innovation & ResearchNew IP lawDiscovery Research Gearing up for changing patent lawStep towards NCE developmentCRAM

1970 1980 1990 2000 2011

Phase I

Early YearsMarket share domination by foreign companiesRelative absence of organized Indian companies

Pre-1970’s

India’s Competitive Advantage

India

Economical Skilled

Manpower

World Class Manufacturi

-ng Facilities

Quality at Low Price

Vibrant Domestic Industry

Talent Pool

Source : Mckinsey study; Economic Times

Significant Cost Advantage

Highest number of USFDA approved plants

Indian Retail Price

US Generic Price

US Brand Price

0

0.1

0.2

0.3

0.4

0.5

0.6

0.015

0.31

0.56

Price ($)Promethazine

India Italy Spain China Taiwan Hungary Israel0

10

20

30

40

50

60

7061 60

2522

95 7

No. of USFDA Approved Plants

Indian Pharmaceutical industry Valued at $22 Billion 3rd Largest in terms of Volume13th in terms of Value Growth Rate : 14% Per Annum 2nd most populous country in the World with current population 1.22 Billion

TRIPS : The Paradigm Shift

EMR• Exclusive

Marketing Rights

Patents• Product• Processes

Others• Compulsory

Licenses • Uniformity

TRIPS

Innovation

Reverse Engineer

ing

TRIPS

Strong IPR in Place to Protect & Nurture Innovation

SynriamArterolane Maleate and Piperaquine Phosphate

New Pricing Policy : A Step towards transforming India

Drug Policy (1994)

Based on market share principle

Cost-Based Pricing

National Pharmaceutical

Pricing Policy 2012

Based on NLEM essentiality of drugs Proposed to cover all

348 drugs

Market-Based Pricing Based on Simple Avg

of all brands with market share >1%

NPPP likely to result in 10-15% price cuts

Impact on industry to the extent of 3-5%

Impact likely to be higher on companies with premium pricing strategy, especially MNCs & companies with relatively higher product/therapeutic concentration

Impact :

Source : ICRA Report Oct’12 ; Economic Times

Boost ‘Affordability & Availabilty’

Imported Medicines which are part of NLEM list for the 1st time under policy’s purview. Eg : Prices of Insulin

Price control over drugs was first introduced in the country in the aftermath of Chinese aggression by Drugs (Display of Prices) Order 1962 and the Drugs(Control of Prices) Order 1963.

MCI & CBDT break the enduring ‘Drs & Pharma Co’s Nexus’

Indian Medical Council Regulations 2009 : Regulations laid by Medical Council of India banning doctors and their associations from accepting freebies

Recent Landmark Move by Finance Ministry : Pharma Co’s Freebies to docs taxable for both Freebies include money, travel facilities, hospitality, etc

Impact :Ethical practices would increaseMedico Marketing is the futureBranding would be pivotal in Business generation

Thank You

Disclaimer: All the Logos used are copyrights of respective Companies.