001- pharmexcil Digest - September 2009 · Award” for outstanding export performance under...

pharmexcil Digest September 2009

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DISCLAIMER This monthly update has been prepared as a service to pharmaceutical exporters from India and pharmaceutical importers in other countries, by PHARMEXCIL (Pharmaceuticals Export Promotion Council of India). No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without prior permission, in writing from PHARMEXCIL and Datamonitor, India.

PHARMEXCIL does not recommend or endorse any specific companies or commercial products and brand names which may find mention in these Monthly News Digest. Through the information contained within these monthly updates PHARMEXCIL does not express any opinion whatsoever concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Table of Contents

1. Chairman’s Message .................................................................................................. 2

2. Executive Director’s Desk ......................................................................................... 4

3. Features ...................................................................................................................... 7

3.1 Big Pharma Eyeing India – Inherent strengths of Indian players driving M&A 7

3.2 Boosting Pharma R&D in India – Government Initiatives ............................... 10

3.3. IP laws shouldn’t interfere with access to generic medicines and parallel

imports ..................................................................................................................... 14

4. Country Focus .......................................................................................................... 17

4.1 The US Pharmaceutical Market: Authorized Generic Agreements – Indian

companies pathway to US Generics Market ............................................................ 17

5. Pharmexcil Activities ............................................................................................... 21

5.1 Pharmexcil activities during August 2009 .......................................................... 21

5.2 Upcoming Pharmexcil activities ........................................................................ 28

5.3 Pharmexcil study reports .................................................................................... 29

6. Indian Pharma in Media .......................................................................................... 33

Knowledge Partner

Vol.1 Issue 3 September 2009

PHARMACEUTICALS EXPORT PROMOTION COUNCIL (Set up by Ministry of Commerce, Govt., of India)

H.O.: 101, Aditya Trade Centre, Ameerpet , Hyderabad – 500038 Tel: 040-23735462/23735466, Fax: 91-40-23735464

E-mail: [email protected]

For more information, visit www.datamonitor.com


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1. Chairman’s Message

Dear Member,

I would like to

inform you that the

proposed “Indo-

Africa Pharma

Business Meet” was

postponed to September 25 -27, 2009 on

the advice of our embassies in West

African countries, who apprehended that

many visitors from these countries may

not be able to attend due to Ramzan on

September 21 2009. I am happy to share

with you that Shri Anand Sharma,

Hon’ble Minister of Commerce and

Industry obliged our request for

presenting the “Pharmexcil Export

Award” for outstanding export

performance under various categories and

“Best Patent Award” for patents secured

during the “Indo-Africa Pharma Business

Meet” at Hyderabad, which is coinciding

with the fifth Annual General Body

meeting (AGM) of our Council.

During the month on August 11 2009, I

have made a representation to “Board of

Trade” and is headed by Shri Anand

Sharma, Hon’ble Minister of Commerce

and Industry. I have taken up the issues

related to exemption of service tax for

pharmaceutical exporters and allocation of

a separate fund of Rs.1, 000 crore for

Small and Medium Enterprises (SME) in

exports, etc.

On the eve of announcement of Foreign

Trade Policy (FTP) by Shri Anand

Sharma, Hon’ble Minister of Commerce

and Industry has convened a meeting with

all the industry promotion council’s in

India and I have represented Pharmexcil. I

am happy to share with you that

Directorate General of Foreign Trade

(DGFT), GOI has considered many of

our representations in the FTP which

include: Addition of several countries in

the focus countries/ product schemes and

extension of export obligation period to 6

months to 12 months for certain products

like Penicillin’s and other drugs imported

under advance license schemes. I take this

opportunity to express sincere thanks to

Dr. Surinder Singh, DCGI and Shri R.S.

Gujral, DGFT who have taken extreme

interest in attending to the representations


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of Pharmexcil for promotion of

pharmaceutical exports.

On August 13 2009, Pharmexcil’s third

regional office was opened in

Ahmedabad. I express sincere thanks to

Shri Hemant G Koshia, Commissioner,

Gujarat State Food and Drug Control

Administration who has taken special

interest in establishing the office.

Also during the month, I have attended

and submitted a representation to the

Ministry of Environment & Forests

suggesting some changes to the proposed

draft amendment to an ACT focusing on

pollution control measures.

I am happy to inform you that after

satisfying service of 2 years as Chairman

of Pharmexcil, I am going to handover

charge to Shri Smitesh C. Shah, Chairman

& Managing Director, Calyx Chemicals &

Pharmaceuticals Ltd during the

Pharmexcil’s fifth AGM (September 25 –

27, 2009). During this period, I have

enjoyed the confidence and support of my

colleague members of the council and

senior government officials from

Department of Commerce, Department

of Pharmaceuticals and Drug Controller

General of India (Department of Health).

I will be failed if I don’t express sincere

thanks to Secretariat of Department of

Pharmaceuticals, Government of India,

who have been extremely supportive in

implementing my ideas and suggestion for

promotion of pharmaceutical exports

from India.

Thanking you,

Yours Sincerely,

Venkat Jasti


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2. Executive Director’s Desk

Dear Member,

I am happy to

bring to the

notice of the

members that a

Nigerian

delegation

headed by Dr. Paul Orhii, Director

General (National Agency for Food and

Drug Administration and Control), had

visited India during August 01 – August

06 2009. This visit organized by

Department of Pharmaceuticals, is indeed

opportune for us given the backdrop of

reports of counterfeit generics

manufactured in China with “Made in

India” labels seized in Nigeria during the

last few months. In the meeting chaired

by Secretary, Department of

Pharmaceuticals, Pharmexcil made a

presentation to the visiting Nigerian

delegation at Delhi on August 3 2009, and

highlighted the credentials of Indian

players in the global pharmaceutical

industry. During the visit, Dr. Paul Orhii

expressed his confidence in the Indian

generics with respect to cost and quality

but the lack of infrastructure in Nigeria to

assess the quality posed a challenge in

adopting the medicines and sought India’s

help in creating awareness programmes to

enhance the adoption of Indian made

generics, training of drug regulatory

personnel and improving curriculum of

pharmacy education in Nigeria, etc.

On August 21 2009, Pharmexcil had

organized an interactive meeting with

Drug Controller General of India Dr.

Surinder Singh at Hyderabad and

representatives from about 100 companies

participated at one day’s notice. Dr.

Surinder Singh while addressing several

queries informed the participants about

the progressive steps being taken up by

Central Drugs Standard and Control

Organization (CDSCO) to address various

competing interests of stakeholders within

the pharmaceutical industry including

those of international regulatory agencies

such as USFDA, WHO and ICH

requirements. He mentioned that his

department had received approval for

substantial addition of manpower that

would enable quick turnaround times for

drug approvals. Dr. Surinder Singh also

pointed that the Government of India has

tightened its regulations such that strict


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action could be taken against

manufacturers of counterfeit/ spurious

drugs. Dr. Singh has assured full co-

operation for promoting Indian

pharmaceutical exports.

An interactive meeting with Indian

ambassador to Azerbaijan, Mr. Debnath

Shaw was organized by Pharmexcil on

August 28 2009, in New Delhi to assist

the Indian exporters to Azerbaijan and

address. The meeting was fruitful with

participation of about 30 members of the

council.

Pharmexcil had a meeting with Her

Excellency, Patricia Figueroa Rodriguez,

Ambassador of El Salvador to India at

New Delhi on September 03 2009. During

the discussion, the Ambassador has

expressed El Salvador’s interest for a Joint

Venture/ Collaboration with the Indian

companies for supply of low cost quality

medicines to El Salvador. We were also

requested to organize a Buyer’s Seller’s

meet in El Salvador.

We also had a meeting with Shri Mahesh

Sachdeva, Ambassador to Nigeria and

Shri Ashok Kumar, Secretary, Department

of Pharmaceuticals on September 03

2009, to discuss the measures to be taken

for India brand image building. A

proposal for establishing a retail pharmacy

chain by experienced Indian/ Nigerian

agencies was discussed to ensure the

distribution of genuine Indian made

generics.

During the month Pharmexcil has

successfully participated in CPHI, South

America in Sao Paulo during August 26-

28, 2009 with participation of 25 members

in India Pavillion supported by

Department of Commerce, GoI.

There has been a good response for

participation in PHARMED 2009

(September 23-26) in Vietnam and about

30 members are participating in the India

Pavillion organized by Pharmexcil.

On September 07 2009, Pharmexcil has

attended a meeting convened by Drug

Information Association (DIA) at

Hyderabad on the subject ‘Quality of

APIs’. The meeting was attended by

senior personnel from regulatory

authorities of USFDA in Delhi/ Mumbai,

WHO, EDQM and TGA – Australia. The

meeting has dealt with some of the good

information of high value to API

exporters from India. The Director and

Deputy Director, USFDA has visited

Pharmexcil’s Head Office in Hyderabad.

DIA has expressed an interest in entering


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into a Memorandum of Understanding for

organizing events involving overseas drug

regulatory authorities and other technical

experts.

As part of the Republic of Korea’s co-

operation project to SAARC countries

Mr. P. Balaram, Assistant Director,

Pharmexcil, is attending a special training

programme on Intellectual Property

Rights from September 03 -19, 2009 as

nominee of Government of India Yours Sincerely,

P.V. Appaji


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3. Features

3.1 Big Pharma Eyeing India – Inherent strengths of Indian players driving M&A Expert Opinion from Datamonitor

Global multinational pharma companies

are scouting for alliances and acquisitions

in the Indian generics market in order to

compensate for slower growth in the

branded business with the expiry of many

blockbuster drugs and declining R&D

productivity. India is a prime example,

where acquisitions allow vertical

integration with active pharmaceutical

ingredient (API) suppliers and access to

low cost and high quality resources like

man-power & facilities (both

manufacturing & R&D). In the long term,

this strategy has the potential to create

synergies, build critical mass and establish

a stronger position in the market.

Expiring branded product patents and drying up of R&D pipelines are major growth drivers for M&As The impetus behind M&As is attributable

to the declining number of new drugs

entering clinical trials; looming patent

expiration dates with more blockbuster

drugs; generic competition eroding market

share; the need to broaden and deepen a

product portfolio; cost savings from

synergy; sharing risk to dilute pressure;

and geographical expansion. Worldwide,

the top 50 pharma companies face patent

expiries worth $115bn on 36 drugs from

2007-2012 (Source: Datamonitor).

The most acquisitive companies overall

remain Big Pharma like AstraZeneca, Eli

Lilly, GSK, Johnson & Johnson, Merck &

Co., Novartis, Pfizer, Roche and Sanofi-

Aventis due to threat of lower earnings

growth with huge patent expirations

(biggest losses include Pfizer’s Lipitor –

Atorvastatin Calcium, AstraZeneca’s

Nexium – Esomeprazole Magnesium,

AstraZeneca’s Seroquel – Quetiapine

Fumarate, GSK’s Seretide – Fluticasone

propionate and BMS’s Plavix –

Clopidogrel Bisulfate) and declining

product pipelines. Apart from this,

governments all across the globe are

working towards bringing healthcare costs

The Drivers for M&A Patent expiry & generic

competition Declining R&D Productivity Gaps in the pipeline Cost savings Risk sharing Geographical expansion


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down through the increasing use of

generics.

Targeting India to tap un-locked growth potential through partnerships/acquisitions Some of the leading Indian pharma

companies like DRL, Ranbaxy, Sun

Pharma, Cipla, Glenmark, Aurobindo

Pharma, Cadila Healthcare, etc. are

realigning their business strategies and

showing willingness to be part of big

pharma’s business through acquisitions

and long term supply agreements. The

recent acquisition of Ranbaxy

Laboratories by Daiichi Sankyo Company;

DRL’s marketing alliance with GSK; and

Pfizer’s alliance with Aurobindo are few

examples indicating the mind set of global

pharma majors.

In an unexpected move, Japan’s Daiichi

Sankyo has recently acquired a majority

stake in Ranbaxy. This has changed the

landscape of Indian pharmaceutical

industry, with Daiichi Sankyo becoming

the second largest pharma company in

India. The deal provided Daiichi Sankyo

with Ranbaxy’s low-cost manufacturing

Big Pharma Vs. India - Major strategic acquisitions/alliances in 2008 & 2009

S.No. Year Acquirer

Target company Nature of

acquisition/ alliance

Total Value Company Country

1 Jul-09 Sanofi Aventis

France, through Merieux Alliance

Shantha Biotech (hiked stake from 60% to 80%)

Acquisition US$783mn (550mn euros)

2 Jul-09 Abbott Laboratories U.S. Wockhardt (nutrition

business) Acquisition US$130mn

3 Jun-09 Vetoquinol SA France Wockhardt (Animal Care Subsidiary) Acquisition US$31.2mn

4 Jun-09 Pfizer (Animal health business) U.S.

Vetnex Animal Health Ltd. (earlier ICICI Venture acquired from Ranbaxy)

Acquisition NA

5 Jun-09 GlaxoSmithKline U.K. Dr Reddy’s Laboratories Ltd

Marketing Agreement NA

6 May-09 Pfizer U.S. Claris Life Sciences Strategic Alliance NA

7 Mar-09 Pfizer U.S. Aurobindo Pharma Marketing Agreement NA

8 Aug-08 Fresenius Kabi AG Germany Dabur Pharma Strategic

Alliance NA

9 Jul-08 GSK-Aspen U.K.-South Africa Strides Arcolabs Supply

Agreement NA

10 Jun-08 Daiichi Sankyo Company Ltd. Japan Ranbaxy Laboratories Acquisition ~US$4.6bn

Source: Datamonitor Research


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expertise, in addition to allowing it to

launch its innovative products in India at

competitive prices. This transaction

reflects a global pharma industry trend,

and although this trend is still in its

infancy, it is expected to continue due to

cost-cutting incentives and as a means of

differentiation and finding new streams of

revenue.

On the biotechnology front, France-based

Sanofi-Avenits has agreed to purchase

additional 20% stake in Hyderabad-based

Shantha Biotechnics (already bought 60%

stake in 2006) at a cost of US$783mn

(Source: Indian Express) from Merieux

Alliance indicating that big pharma is on

an acquisition spree even with biotech

companies. Given the rise of pandemics

that arise from other vectors, animal

healthcare now seems like an attractive

market to be in for big pharma as a part of

their new growth avenues. India is one of

the top five poultry and live stock markets

in the world with market size of

approximately INR 1.2bn (Source: IBEF)

and this market is growing in double digits

year on year. Thus, animal healthcare units

of domestic companies are now

increasingly becoming acquisition targets

for global pharma companies; Pfizer’s

acquisition of Ranbaxy’s Vetnex Animal

Health Ltd. being the case in point.

India Pharma Inc. likely to benefit from the global consolidation process The global pharma companies would

continue to close more collaborations,

M&As and strategic alliances to

consolidate their presence in India

depending on the business model and size

of the target company. Most of the times,

these deals are resulting in a win-win

situation for both domestic companies

and big pharma, wherein the former

establishes front end presence by gaining

access to wider geographic reach and

innovator drugs, whereas the latter gets

access to low cost man-power and

manufacturing processes and facilities

along with wide spread marketing and

distribution channels. As the western

market becomes more saturated, vertical

integration in India can prove incredibly

valuable for reaching critical mass and to

reduce costs, which is especially

advantageous in the generic sector.

By Sharmila Ponakala, Senior Consultant,

Healthcare Consulting, Datamonitor


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3.2 Boosting Pharma R&D in India – Government Initiatives Expert Opinion from Datamonitor

The Indian pharmaceutical market has

grown from a mere US$0.3bn in 1980 to

~US$19bn in 2008 capturing 10% of

global market share in volume terms

(ranking 3rd) and 1.5% in value terms

(ranking 14th) (Source: Department of

pharmaceuticals, Government of India). In

India, the total investment in R&D as on

June 2008 stood at Rs.29.73bn, 9.9% of

revenues (Source: CMIE Prowess, data for an

aggregate of 151 companies). This investment

in R&D seems abysmally low when

compared to the $ 65.2 billion that the US

pharma industry spent on R&D (17.4% of

total sales) during 2008.

As per Department of Scientific &

Industrial Research (DSIR),

there are 1327 in-house

R&D units (of these nearly

1245 are in the private sector

and the remaining are in the

public/joint sector) having

valid recognition as on 31st

December 2008 across the

industries. In India low

investments in innovative

R&D is mainly due to

limited size of balance sheets

and profitability compared to developed

countries. Although there has been a

significant improvement on NCE (new

chemical entity) research over the past few

years especially post the new ‘product’

patents regime, there is a strong need for

government support to develop the

financial muscle to boost innovative

R&D.

There have been several initiatives taken

by the Indian government to boost R&D

in India and towards that end the vision

of the task force on ‘Strategy for

Increasing Exports of Pharmaceutical

Products’ formed by the Ministry of

Commerce and Industry, Department of


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Commerce, is worthy of mention: "To

provide intellectual capital to make available safe,

cost-effective, contemporary, quality therapeutics to

the people of India and help reduce percentage of

mortality and morbidity while emerging as a

significant player in the global market place."

Major Initiatives from the Government

Pharma Vision 2020 envisions India

among the top five global pharma

innovation hubs by

the year 2020. It

aims to create more

than 5 lakh high

value jobs with an

investment of

Rs.50bn to

Rs.100bn with

substantial

contribution from

private bodies under the public private

partnership (PPP) model. The department

of Pharmaceuticals (DoP), which was

created in July 2008, is contemplating

setting up major projects including

Pharma City at Hyderabad, two pharma

clusters, four R&D hubs, vaccine

development centres and educational

campuses in various parts of the country

to augment R&D activity in India.

DoP has worked out various proposals to

encourage innovative R&D and

manufacturing activities in the domestic

pharmaceutical industry. The department

has also set apart Rs.200mn for promoting

research and development activities of

small and medium sized pharmaceutical

companies. The government is granting

soft loans to set up R&D units and setting

aside US$422.96mn (Source: IBEF) for

establishing 6 National Institutes for

Pharmaceutical Education and Research

(NIPER) in India

over the next five

years. The

government is also

creating a synergy

between the

pharmaceutical

industry and

academic

institutions and

publicly funded R&D organizations to

provide major stimulus to R&D.

The National Biotechnology

Regulatory Authority (NBRA) bill is

aimed at consolidating and enhancing the

effectiveness and efficiency of

biotechnology regulation, promoting

public confidence in the regulatory system

and at increasing collaboration within

state governments. The bill is set for

Cabinet approval and introduction during

DoP- Major R&D Proposals

Innovative drug discovery through clinical trials for 34 molecules

Development of Pharma incubatorsVenture Finance and Incubation Fundfor Innovative R & D in Pharmaceuticals

Setting up of GMP Compliant Biological / Bio Pharmaceutical

testing Lab; GLP Compliant ChemicalLab and Large Animal House Facility


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the next parliament session. The health

ministry in India is also taking initiatives

to regulate human genetic research and

setting up a Biomedical Research

Authority to govern the sector.

National Vaccine policy on the cards

The Government of India is planning for

a comprehensive national policy on

vaccines to ensure self sufficiency in

vaccine production. This policy will

enable to establish a separate vaccine

regulatory authority boosting R&D in

development of vaccines. This will also

ensure affordable and stable supply of

vaccines to the national immunization

program addressing national health

security and bio-security concerns and

preventing mortality and morbidity of

diseases that affect large populations,

including children.

Stimulus package for non

communicable diseases - The

government is framing an action plan in

its 11th plan by allotting around

Rs.16.61bn (Source: Pharmabiz, July 2009)

under the National Program for

Prevention and Control of Diabetes,

Cardiovascular Diseases and Stroke

(NPDCS). This program focuses on

health promotion and ensuring early

detection and appropriate management of

life style diseases through nation wide

awareness programs. In a similar fashion,

the government has also sanctioned

Rs.25bn (10-fold increase compared to

10th plan) for the National Cancer Control

Program under the 11th plan for early

diagnosis taking facts like shortage of

oncologists and lack of diagnostic facilities

into consideration.

The Pharmaceutical Research &

Development Support Fund was

established by the Department of Science

& Technology (DST) in 1994-95 to

promote collaborative R&D in the

pharmaceuticals sector. The allocation for

this fund by DST has increased in the

recent past. Currently, DST has allotted a

total of Rs.1500mn, of which Rs.800mn

are to be allocated for loans and

Rs.700mn for grants-in-aid. A total of 22

agreements have been signed in 2006-07

with 2 patents filed and 15 projects

recommended for funding (Source: Research

and Development in Industry, an overview Nov

2007 Issue by DST).

Foreign Direct Investment- In India,

the pharmaceuticals sector has been able

to attract FDI worth Rs.21.41bn during

the period from April 2007 to April 2009


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(Source: Department of Industrial Policy &

Promotion, Ministry of Commerce & Industry)

with contribution from 36 countries, of

which top 5 include- Mauritius (56.36%),

Singapore (11.18%), USA (5.81%), UAE

(4.73%) and Canada (4%), constituting

approximately 82% of FDI in the area of

pharmaceuticals. For the drugs and

pharmaceuticals sector in India, FDI limit

up to 100% is permitted on the automatic

route based on certain conditions.

Tax breaks to boost pharma & biotech

R&D- Under the Union Budget 2009-10,

the government has provided tax breaks

like extension of scope of current

weighted deduction of 150% on in-house

R&D expenditure to all manufacturing

businesses with few exceptions.

India is gearing up to become global

innovation R&D hub by 2020

The market size of Indian pharma

industry is expected to reach US$30bn by

2020 with increase in healthcare

expenditure as a % of GDP from 7% in

2007 to 13% by 2015. The drug discovery

market in India was worth US$800mn in

2007 and is expected to grow at annual

growth rate of 30%. The government has

been paying special attention to promote

and support innovative R&D in the

country over the years in the form of

giving several fiscal incentives and other

support measures to help pharma

companies establish their own in-house

R&D units. With its leadership in generics

space, the domestic pharma industry

needs to grow strong in drug discovery

and innovation mainly by creating world

class R&D infrastructure, setting up

mechanisms for R&D funding through

the public-private partnership route and

upgrading human resources for drug

discovery innovation.




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3.3. IP laws shouldn’t interfere with access to generic medicines and parallel imports Feature article by Pharmexcil

[Pharmexcil review on Working paper by Kevin Outterson, May 2009. Boston University, School of law, USA] The term counterfeit should be reserved for

goods that violate trademark laws, the

classic definition of counterfeit under U.S.

law focuses exclusively on violations of

trademark law and does not concern itself

with patent or copyright infringement.

Current U.S. law, the TRIPS Agreement,

and the historic WHO definitions all

agree: counterfeit drugs must bear a false

trademark.

Substandard, contaminated or adulterated

medicines are a health risk hence the

import safety rules should focus on these

safety issues rather than IP disputes. If a

drug is legally generic in both the country

of production and the destination market,

customs authorities in third countries

should not impound it during transit. And

yet this is exactly what happened in recent

cases of the Dutch seizures.

These rules are not related to safety at all,

but are solely focused on protecting the

patent rents of the pharmaceutical

industry. The traditional WHO definition

of counterfeit focuses on trademark issues

of drugs “deliberately and fraudulently

mislabeled with respect to identity and/or

source”, but some patent-based drug

companies are now attempting to expand

the definition to include any violation of

any IP right. For example, a United

Nations Interregional Crime and Justice

Research Institute report recently defined

counterfeiting as “illegal reproduction or

imitation of products, given that this

illegality is the result of a violation of any

type of intellectual property rights”.

Likewise, (Anti-Counterfeiting Trade

Agreement) ACTA is reported to apply to

any violation of IP rights, broadly

interpreted.

This shift illustrates the need for a

transparent and accountable process in

IMPACT and ACTA. Under TRIPS, the

only conduct that must be criminalized is

“willful trademark counterfeiting or

copyright piracy on a commercial scale”.

This distinction is also found in U.S. law.

Nothing in TRIPS requires criminalization

of patent infringement. Furthermore, the

Doha Declaration’s mandate that TRIPS

be interpreted in a way “supportive of

WTO Members’ right to protect public

health and, in particular, to promote

access to medicines for all” suggests that


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IP laws should not interfere with access to

generic medicines and parallel imports.

Criminalizing unintentional acts of

infringement by generic manufacturers

will likely chill entry of affordable generic

drugs into the market.

Statistics on counterfeit medicine are

widely distributed but are neither reliable

nor transparent. Estimates on the scope

of the counterfeit drug problem vary

greatly. Estimates on prevalence in various

countries range from 1% to 50% of the

drug supply. Recently, IMPACT estimated

the prevalence of counterfeit medicines to

be less than 1% of sales in developed

countries – despite the fact that the

potential profit of criminal counterfeiters

is highest in these countries – and

between 10% and 30% in developing

countries, where the profit potential is

lower. These estimates do not come from

peer-reviewed journals, and many actually

come from the pharmaceutical companies

themselves.

IMPACT seeks to expand border

enforcement against drugs subject to IP

disputes. This effort goes well beyond the

TRIPS, WHO and U.S. definitions of

counterfeit, and may reduce access to

desirable generic drugs or cheaper brand

name drugs parallel traded from other

countries. Both IMPACT and ACTA seek

new IP and customs enforcement rules

for an expanded array of products. These

expanded definitions may serve the

interests of patent-based drug companies.

IMPACT has also had some success in

pushing developing countries to adopt

laws providing for stronger intellectual

property protection.

Kenya’s recently enacted Anti-

Counterfeiting Act provides several

measures aimed at targeting the general

availability of counterfeit goods in the

country. While the bill does have some

positive aspects, it also contains several

provisions that could hamper the

government’s ability to provide access to

essential medicine to the estimated 1.4

million Kenyans living with HIV/AIDS.

The bill needlessly confuses counterfeiting

with violations of non-trademark

intellectual property rights. The bill also

weakens existing Kenyan legislation

allowing parallel imports. Uganda, where

over 5% of the adult population is

infected with HIV/AIDS, is also

considering a similar bill. The Ugandan

legislation reportedly calls for the death

penalty for drug “counterfeiters;” the


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mixture of imprecise definitions and

capital punishment may chill legitimate

markets in generic drugs.

In addition to the legislative changes being

encouraged by IMPACT, international

laws on counterfeit goods may soon be

dramatically altered by ACTA. ACTA is

being negotiated by 13 countries, led by

the U.S. and the European Union. It is

difficult to say anything definitive about

ACTA because the negotiations are taking

place in secret, and no verified draft of the

agreement has been circulated. Several

points are notable in the leaked drafts,

which we can only assume are authentic.

First, the 20 May 2008 and 25 June 2008

ACTA texts covered only trademark and

copyright; in the text dated 7 July 2008 the

scope was expanded to cover all

intellectual property rights described in

TRIPS. This is precisely the expansion of

IP rights criticized with respect to

IMPACT. Second, ACTA proposes to

modify existing criminal standards and

sanctions, as well as border measures,

giving customs officials more authority to

seize and destroy infringing shipments

and to disclose information to right

holders on those shipments. One proposal

by Japan would expand the definition of

“counterfeit” well beyond the accepted

bounds of “willful trademark

counterfeiting” to include criminal

penalties for “trademark infringement

caused by confusingly similar trademark

goods”. These changes could expose

generic manufacturers to significant risks

without justification. Third, the U.S.

proposed that ACTA cover “in-transit”

shipments as well as import and export,

the precise issue raised by the Dutch

seizures.

Clearly, a new international organization is

being formed. It is important not to be

too distracted by the details in ACTA,

because we are speculating in the shadows

rather than engaging in a transparent and

robust debate. But it certainly seems

plausible that public health concerns are

raised by some of the provisions of

ACTA, and should be fully vetted with

open and democratic processes. Both

Canada and the European Parliament

have called for transparency in the ACTA

negotiations, but reportedly the U.S.

government is blocking disclosure as a

national security secret.

Click on the following link For Complete Report. http://www.pharmexcil.com/data/uploads/anti_counterfeit.pdf


17

4. Country Focus 4.1 The US Pharmaceutical Market: Authorized Generic Agreements – Indian companies pathway to US Generics Market Expert opinion by Datamonitor

Authorized Generics (AG) Agreements

are a lifecycle management strategy for

drugs entering into their final phase of

patent protection. Innovator companies

often enter into AG agreements in order

to avail of a continued revenue stream

from mature brands as well as to minimize

the impact of generic erosion in well

regulated markets. However, this strategy

is more of a deterrent and often viewed as

yet another ‘market entry barrier’ by

generic companies who would like to

ensure that the market has an even

‘playing field’ for all the generics of drugs

with recent patent expiries. AG

agreements will effectively ensure that

‘innovator’ companies can keep their

fingers in both the pies: the branded

market as well as the ‘own-generics’

market – this will lead to increased

competition and hence extra marketing

and promotional effort from generics

companies.

Exhibit No.1: Final Settlement Agreements during fiscal year 2004-08 which included AG Provisions, US

Source: Datamonitor Research, Federal Trade Commission (FTC) Interim Report, June


18

AG agreements are usually struck between

a company with an ‘original’ branded drug

and a generic company willing to market a

branded version of the generic, under a

different brand name. In many cases the

generic company is often a subsidiary of

the innovator company; in such cases the

company retains all the revenues

generated by the branded generic too,

thus reducing the impact of generic

erosion on the parent brand. Therefore

such ‘own-AGs’ represent the best-case

scenario for branded companies.

According to Datamonitor analysis,

between 2004 and 2008, 40 AG

agreements were entered into by 14

branded companies. Of these nearly 45%

of agreements were own-AG agreements

that were drawn-up by just one third of

the companies (4-5 companies). It is

interesting to note that during this period

Pfizer was involved in the maximum

number of AG agreements (30% of all

AG launches) and it was also the most

frequent branded partner involved in

own-AG launches.

Source: Datamonitor Research

Exhibit No.2: Authorized Generics Agreements- Key Drivers & Resistors

Authorized Generic

Resistors•Will lose considerable market share as more

generics enter•Likely to capture little

market share in the absence of a 180-day exclusivity

period

Drivers•Gain considerable market

share during 180-day exclusivity period

•Advantage in markets where stakeholders are reluctant to make generic substitution

Branded Pharma

Share revenues with generic partner (if external)

Maximize revenues post-generic entry

Generic PharmaShare Revenues with branded partner (if external)

Enter market without engaging in costly litigation

Authorized Generic

Resistors•Will lose considerable market share as more

generics enter•Likely to capture little

market share in the absence of a 180-day exclusivity

period

Drivers•Gain considerable market

share during 180-day exclusivity period

•Advantage in markets where stakeholders are reluctant to make generic substitution

Branded Pharma

Share revenues with generic partner (if external)

Maximize revenues post-generic entry

Generic PharmaShare Revenues with branded partner (if external)

Enter market without engaging in costly litigation


19

Correlation between therapeutic class and generic erosion It is not surprising to note that most

innovator companies tend to defend their

most profitable brands, usually

blockbusters, through the AG strategy.

And most of these profitable and often

blockbuster brands belong to the top

three therapeutic categories including

drugs for cardiovascular (CVD) diseases,

infectious diseases (ID), and central

nervous system (CNS) disorders. In the

2004-2008 nearly two thirds of all the AG

launches were for drugs belonging to

these therapeutic categories. The pre-

generic quarterly sales of these three

therapeutic categories in the US had

totaled $6 billion in the analysis period.

Correlation between the US and Indian markets Ranbaxy, Dr. Reddy’s Laboratories and

Sun Pharma, leading generic players in

India, usually opt for first-to-file (FTF)

advantage which confers on them the

advantage of the 180-day exclusivity. It

has been observed that once authorized

generics are launched, the market share of

Para-IV challenged products often

reduces resulting in marginal decline in

profitability (~10% to 20% based on the

type of the product). Hence, generic

companies are factoring the presence of

authorized generic products for every

FTF product in the US. The Indian

generic companies are finding ways to

resolve this problem by entering into

supply agreements with innovators. The

classic example is, Dr.Reddy’s

Laboratories Limited (DRL), the first

authorized generics supplier from India

for Merck’s Proscar (Finasteride) and

Zocor (Simvastatin). DRL is also the first

company to launch generic version of

GlaxoSmithKline’s Imitrex (sumatriptan

succinate), under the AG agreement, in

the United States in February 2009 ahead

of its competitors. DRL had to settle a

patent litigation with GlaxoSmithKline in

October 2006 in order to gain the AG

agreement. DRL’s sumatriptan

contributed Rs.7,188 Mn in sales revenues

(10% of company’s revenues) for DRL

for FY2008-09 (Source: Company annual

report, 2009).

The authorized generics outlook

The dominance of the innovator

pharmaceutical companies in the US has

long been an issue for debates. The recent

lack of innovative products entering the

global market has been further intensified

by delays in the launch of ‘cheaper’

generics – these phenomena are often

viewed as strong-arm tactics adopted by


20

innovator companies to ensure continued

market dominance and these have led

regulators in the US to look more closely

at the business ethics within the

pharmaceutical market.

However, whether AGs can be viewed as

anticompetitive business measures

remains to be seen even though the issue

has come under scrutiny of the regulators.

As of now, AGs seem to be a well

accepted business practice according to a

recent report by the FTC which implies

that AGs are pro-consumer because they

have an impact on generic prices.

Despite the efforts made by large generics

companies, AGs seem to have a firm

business footing in the US market in the

short term. Hence AGs are here to stay at

least until such time that the US Congress

passes the bill

(Rockefeller/Schumer/Leahy Bill) that

makes AGs illegal. However, this need not

be viewed as an entry barrier for Indian

generics players since they can always opt

for entering into supply agreements with

innovator companies to benefit from this

business model.




21

Brand India campaign in South Africa

5. Pharmexcil Activities

5.1 Pharmexcil activities during August 2009

Following are the major activities/ events

that Pharmexcil is associated with during

the month

A. Delegation to South Africa, Mozambique, Zambia and Botswana Pharmexcil has organized a trade

delegation to South Africa, Mozambique,

Zambia and Botswana as a part of project

“Brand India Campaign” for Indian

Pharmaceuticals in Africa being

undertaken by Pharmexcil with active

support of the Department of Commerce,

GoI. An interaction with the local players,

media, regulatory authorities, etc and

explained about the quality of generic

drugs supplied by Indian pharmaceutical

companies. The delegation has met Health

Ministers of these countries and Indian

mission to these countries has extended

Participants at interactive meeting with importers of Zambia

Inauguration of Buyer Seller Meet by Indian Ambassador at Mozambique

Participants at interactive meeting with DrugController of Botswana


22

full co-operation in organizing the

meetings and the event.

B. Meeting with Shri Rajeev Kher, Joint Secretary, Minister of Commerce & Industry, GoI Shri Rajeev Kher, Joint Secretary, Minister

of Commerce & Industry, GoI held a

meeting with 6 pharmaceutical exporters

who have been referred by Pharmexcil

and are impacted with the issue of seizure

of generics by EU authorities under the

disguise/ categorization as counterfeits

during transit in European ports. Senior

officials from the Department of

Commerce, GoI has discussed in detail

about the products and issues involved in

the seizure. They requested the members

to provide complete information so that

GoI can file a case with Dispute

Settlement Mechanism of WTO regarding

the seizure of Indian generic medicine

consignments in transit at European

ports. The exporters impacted by these

seizures have appreciated the serious

approach taken by GoI in support of

Indian Pharmaceutical players.

C. Representation to “Board of Trade”, Department of Commerce, Government of India

On August 11 2009, Pharmexcil’s

Chairman Mr. Venkat Jasti made a

representation to “Board of Trade”,

which advises the Government of India

on policy measures connected with India’s

foreign trade on issues related to

exemption of service tax for

pharmaceutical exporters and allocation of

a separate fund of Rs.1, 000 crore for

Small and Medium Enterprises (SME) in

exports and Registration, Evaluation,

Authorization and Restriction of

Chemicals (REACH) for exports of

certain chemicals and intermediates to the

European Union.

D. Pharmexcil opens its 3rd regional office in Ahmedabad On August 13 2009, Pharmexcil’s third

regional office was opened in Ahmedabad

by Shri Hemant G Koshia, Joint

Commissioner of Gujarat State Food and


23

Drug Control Administration. Apart

from Chairman, Vice-Chairman and

Committee of Administration of

Pharmexcil, Pharmexcil’s immediate past

President has participated in the inaugural

function. Pharmexcil has assured local

members that complete information will

be provided through the regional office

including Registration-Cum-Membership

Certificate (RCMC). Following is the

address of the new office: Pharmaceutical Export Promotion Council

7-C, Trade Centre Near Stadium Cross Road Navarangpura Ahmedabad, India Tel: 079-40050497. Email id: [email protected]

E. Patent litigation as barrier in international trade

On August 21 2009, Pharmexcil has

organized a seminar on “Patent Litigation

as Barrier in International Trade” at

Mumbai. Shri Arun Jha, IAS, Jt. Secretary,

Dept. of Pharmaceuticals, Government of

India was the Chief Guest during the

event and addressed the gathering.

Following presentations were given by

eminent people

1. Key note address was delivered by Prof.

(Dr.) Shamnad Basheer, Professor in IP

Law, National University of Juridical

Sciences, Calcutta, Govt. of India on

“Barrier to International Trade through

Patent Litigation and New Trade

Agreement”

2. Patent Opposition Procedures &

Strategies by Mr. Essenese Obhan,

Obhan & Associates, New Delhi

3. Patent Litigation – A Non-Tariff Barrier

by Mr. Sanjay Mariwala, Managing

Director, Omniactive Health

Technologies Ltd, Mumbai


24

4. Cross Border Seizures by Dr. Alka Mehta,

Patent Attorney, Cipla Ltd

All the presentations can be accessed in the following location on the pharmexcil’s website: http://www.pharmexcil.com/v1/aspx/Conferences.aspx F. Meeting with DCGI at Hyderabad

An interactive meeting with Drug

Controller General of India Dr. Surinder

Singh was organized by Pharmexcil at

7.30pm on August 21 2009 at Hotel Taj

Krishna at

Hyderabad. The

interaction with

industry arranged at

one day’s notice was

attended by the top

management of over

100 companies that

include Alkali

metals, Aurobindo pharma, Apex Drugs,

DRL, Enon Drugs, Fleming, Glochem,

Matrix, Meenaxy, Metrochem, MSN,

Ogene, Relisys, Sarvotham,

Shantabiotech, Sipra, SMS, Suven,

Synthokem etc. Dr PV Appaji welcomed

the dignitaries Dr Surinder Singh, DCGI,

Shri R P Meena, Director General, Drug

Control Administration, AP.

Shri Venkat Jasti, Chairman, Pharmexcil

gave a presentation on the Pharmexcil’s

activities. Mr R P Meena said that the AP

State Drugs Administration is working

with an open mind to facilitate the

industry. The pending files with the

department are taken up on FIFO basis.

Earlier there were cases of pending files

for 1-2 years. He said that 294 cases of

fixed dose combinations are restricted for

manufacture in AP from Sept 2007.

However products manufactured in other

states are marketed in AP as there is a stay

granted by TN High court.

Dr Surinder Singh

gave a detailed view

of the current

scenario of Indian

Pharma industry in

the international

market. Dr. Surinder

Singh while

addressing to various queries informed the

participants of various progressive steps

being taken up by Central Drug Standards

and Controller Organization (CDSCO) to

address various competing interests of

stake holders including those of

international regulators agencies such as

WHO and ICH requirements. He noted

that his department received approval for

additional manpower which would enable

quick turnaround times and drug

approvals by the regulator. Dr. Surinder


25

Singh also pointed that the Government

of India has tightened the regulation to

take strict action against manufacturers of

counterfeit drugs. He has also informed

that drug registration details with his

office would shortly available on DCGI

website and DCGI is considering opening

zonal offices at Bangalore and

Chandigarh. Later it is proposed to open

offices at Indore, Goa and Sikkim.

G. Meeting with Ambassador of India, Republic of Azerbaijan

An interactive meeting with Indian

ambassador to Azerbaijan, Mr. Debnath

Shaw was organized by Pharmexcil on

August 28 2009, in New Delhi to assist

the Indian exporters to Azerbaijan and

address their concerns. The meeting was

fruitful as about 25 members of the

council have participated in the interaction

with a short notice of a day.

Mr. Raghuveer Kini, Additional Executive

Director, highlighted Pharmexcil

initiatives and future plans to help

exporters promote trade in CIS countries.

During the interaction, Mr. Debnath Shaw

briefed about the pharmaceutical market

dynamics in Azerbaijan and the

neighboring countries and highlighted the

steps taken by the Embassy in Azerbaijan

to counter the misconception of

counterfeit drugs from India. Some of the

issues highlighted by participants were

presence of unregulated distribution

channels, lengthy and tedious registration

process (2-3 years), negative publicity on

drugs supplied from India, presence of

one quality check laboratory, limited

payment security cover for exports by

banks in Azerbaizan or Indian banks/

EXIM bank, high cost of visa process to

Azerbaizan, etc. Further to boost

pharmaceutical exports to Azerbaijan,

Pharmexcil is leading a trade delegation in

the month of November 2009. After the

buyer’s sellers meet during the visit an

interactive session with local doctors,

regulatory authorities, media and Indian

residents are being planned during the

visit.

H. Medical Device Training Programme

Central Drugs Standard Control

Organization (CDSCO) in association

with WHO organized two days training

programme during August 28 – August 29

2009 on regulation of Medical devices in

Hyderabad. Dr.S.Eswara Reddy and Mr.

Chandra Sekhara Rao conducted the

programme on behalf of CDSCO. The

event was organized with the objective of


26

discussing the proposed Schedule M-III,

GMP guidance for medical devices. About

70 delegates from Industry and various

state drug control authorities participated

in the event. The session was inaugurated

by Chief Guest Shri R.P. Meena, Director

General, Drug Control

Administration, AP. Dr.

P.V. Appaji, Executive

Director, Pharmexcil has

given the concluding

remarks and distributed

certificates to the

participants.

I. CPHI Brazil

Pharmexcil has

participated in CPHI,

South America in Sao

Paulo during August 26-28, 2009 with

participation of 25 members in India

Pavillion supported by Department of

Commerce, GoI. The event was

successful with good leads received by the

participated members and the Indian

Pavillion was inaugurated by Indian

Counsel to Brazil. J. Meeting with ambassador of El Salvador to India Pharmexcil had a meeting with Her

Excellency, Patrica Figueroa Rodriguez,

Ambassador of El Salvador to India at

New Delhi on September 03 2009. During

the discussion, the Ambassador has

expressed El Salvador’s interest for a joint

venture/ collaboration with the Indian

companies for supply of low cost quality

medicines to El

Salvador. We were also

requested to organize a

Buyer Seller Meet in El

Salvador.

K. DIA meeting on

Quality of API’s

Pharmexcil has attended

a meeting on September

07 2009 with Drug

Information Association

(DIA) at Hyderabad on

the subject of Quality of API’s. The

meeting was found to be of high

importance to the exporters of API’s to

the regulated markets. Senior Drug

regulatory officials of USFDA in Delhi/

Mumbai, WHO, EDQM and TGA

Australia have participated in the meeting

and have given presentations related to

Quality of API’s. The Director and

Deputy Director, USFDA, Delhi has

visited Pharmexcil’s head office in

Hyderabad and had a fruitful meeting on

matters related to Indian Pharmaceutical


27

industry. DIA has expressed an interest in

signing a Memorandum of Understanding

for organizing future events involving

overseas FDA officials and technical

experts.

L. List of circulars issued by

Pharmexcil during the month

Following are the list of circulars issued by

pharmexcil to the members for the period

August 01 2009 – September 08 2009

List of circulars issued by Pharmexcil during the period, August 01 2009 – September 08 2009

Date of

issue Subject of Circular

3 Sep 2009 Awards for companies who secured patents-last date extended 27 Aug 2009 Meeting with Ambassador of India, Republic of Azerbaijan (Urgent -Short Notice Programme)

25 Aug 2009 Pharmexcil Awards for Outstanding Export Performance - Extension of Last Date for Submission of Nominations to 7.09.2009

25 Aug 2009 9th SAARC Trade Fair in Thimpu, Bhutan 24 Aug 2009 Ahmedabad Office Address- Reg

17 Aug 2009 “Indo-Africa Pharma Business Meet” at Hyderabad during 25-27th September 2009 at Hotel Marriott, Hyderabad

12 Aug 2009 Patent Litigation as Barrier in International Trade 7 Aug 2009 CPhi Worldwide 2009, Madrid, Spain 5 Aug 2009 Invitation - Inauguration of Branch office at Ahmedabad 4 Aug 2009 “Indo-Africa Pharma Business Meet” at Hyderabad during 17-19th September 2009 at Hyderabad.

3 Aug 2009 Nominations are invited for Election as ‘Member of Committee of Administration’ for the years 2009-11 against retiring members

3 Aug 2009 Elections 2009 – Enroll as Ordinary Members 1 Aug 2009 Pharmexcil Digest (News Letter – August 2009) 1 Aug 2009 Visit of Director General, NAFDAC To India Note: The complete text of the circulars can be accessed in the following location on the Pharmexcil’s website. http://www.pharmexcil.com/v1/aspx/NewsBulletin.aspx


28

5.2 Upcoming Pharmexcil activities

S. No

Event/ Conference

Date Description/ comments

1 Pharmed 2009, Vietnam

September 23 – 26, 2009

Pharmexcil is participating in Pharmed 2009 by organizing an India pavilion. For the benefit of members in Pharmaceuticals / Medical devices & Surgical sectors, stalls of 6 and 9 sq. meters sizes will be offered. There is also provision of Common Space for small exporters.

2

Indo - Africa Pharma Business Meet, Hyderabad

September 25 – 27, 2009

Pharmexcil is organizing an international event, “Indo-Africa Pharma Business Meet” as a part of project approved by Ministry of Commerce & Industry. About 80 delegates representing Drug Regulators, Procurement Agencies, Media and Manufacturers/ Distributors from about 18 countries are expected to attend this business meet and Pharmexcil is also organizing an exhibition, buyers/ sellers meet and technical sessions.

3

Pharmexcil Awards for Outstanding Export Performance for the years 2005-06, 2006-07, 2007-08 and 2008-09

September 25 – 27, 2009

Committee of Administration of the Council has decided to institute ‘Pharmexcil Export Awards’ for the outstanding export performance. There will be one Trophy and one Merit certificates and one Award for Emerging Exporter in each of the product category covered under council for SSI, Non-SSI and Merchant Exporters separately. The circular can be accessed on the pharmexcil website (http://www.pharmexcil.com/v1/aspx/viewNewsBulletin.aspx?ID=568)

4 CPhI Worlwide, Spain

October 13 - 15 2009

Pharmexcil is participating in the event and has booked the India Pavilion at hall no.5. The minimum space to be booked by the exhibitors outside India Pavilion is 20m2 (shell scheme) and 30m2 (bare space). However, in India Pavilion minimum stall size is 12m2 and common space for 8 small exporters.

5

Delegation to CIS countries including Azerbaijan

November (Date to be finalized)

Pharmexcil is leading a delegation to Azerbaijan in November. After the buyer’s seller’s meet an interactive session with local doctors there, the regulatory authorities, media and Indian residents are planned. The delegation is planned in such a way that it coincides with the International fair in Baku.

6 CPhI India 2009, Mumbai

December 1-3, 2009

Pharmexcil will be participating in CPhI India 2009 to be held during 1-3rd December, 2009, at Mumbai. Due to cancellation of CPhI 2008, the exhibitors were given option either to take refund or transfer the amounts paid for CPhI 2009. The members who have opted to transfer the amounts to CPhI 2009 were informed that they would be given preference in allotment of stalls, apart from the benefit of getting the stalls at the same cost as that of 2008. Some of the participants in the India Pavilion at CPhI 2008 have opted to keep their amounts transferred to CPhI 2009. Out of 76 stalls, 43 stalls have been allotted to those members in CPhI 2009 as per their choice and the remaining 33 stalls are available for allotment

All the above information can be accessed from Pharmexcil website on the following link:http://www.pharmexcil.com/v1/aspx/NewsBulletin.aspx


29

5.3 Pharmexcil study reports

1. India is most attractive destination for pharmaceutical manufacturing: Reveals OPPI - E&Y study

As per OPPI-E&Y report, ‘Taking Wings

– Coming of age of the Indian

pharmaceutical outsourcing industry, the

inherent strengths of the Indian

Pharmaceutical Industry are

1. India has emerged as a growing

customs manufacturing and

outsourcing destination with a

growth rate of 43% that is thrice

the global market rate

2. Rates India as most attractive

among six prominent

manufacturing locations – India,

China, Eastern Europe, Puerto

Rico, Singapore and Ireland.

Outsourcing is no more an option

but a strategic imperative for

pharmaceutical companies across

the globe

3. The manufacturing cost of U.S.

FDA approved plants in India are

65% lower than in U.S.A and 50%

lower than in Europe

4. The facility setting-up cost in

India is 30% lower than in the

U.S.A.

5. India offers strong cost arbitrage

in end-to-end R&D with potential

savings of 61% compared with the

U.S.A. Research chemistry and

drug development are stages

where close to 85% of savings can

be achieved. (Source: http://www.indiaoppi.com/OPPI%20-

%20EandY%20Report%202009.pdf)

Pharmexcil research also reveals that India

is estimated to have 142 U.S. FDA

approved plants and 136 EDQM

approved plants accounting for over 28%

of Type-II active Drug Master Files

(DMFs) (1,947 out of total 6,876 as on

March, 2009). India accounts one out of

every four ANDA approvals from U.S.

FDA and one out of every five Certificate

of Suitability (CEPs) granted by European

Directorate of Quality Medicine (EDQM).

It is a well know fact that India is also

emerging as a hotspot for drug discovery

and development services growing at 65%

or more than 3.5 times the global rate.

The driving factors for R&D are:

Strong Chemistry Capability

Designing and managing CGMP

manufacturing facilities

Skilled manpower & lower capital

expenditure

Reverse Engineering potential and

The Cost-Value proposition


30

2. Effect of Economic crisis on Pharmaceutical consumption, expenditure & Prices IMS Health in a study report titled

“Indicators for Tracking the Effect of the

Economic Crisis on Pharmaceutical Cons

umption, Expenditures and Unit Prices”

sponsored by WHO reports that to date

[Q1 2009], there does not appear to be a

major change in overall volume of

medicines used, or a specific decline in

medicines used to treat chronic diseases -

both of which occurred during the Asian

economic crisis of 1997. Overall,

countries have absorbed moderate price

increases without affecting medicine

consumption, with the exception of

Estonia and the private sector in Russia

where three consecutive quarters of

volume decline have been observed. The

complete report can be accessed at http://www.who.int/medicines/areas/policy/WH

O_IMSreportonglobaldrugconsumption.pdf 3. Study report on “Indian Natural Medicinal Products: For Promotion of Exports”

Dept. of AYUSH in 2007 sponsored a

need assessment study to International

Trade Centre (ITC) for enhancing export

of Herbal and Ayurvedic products from

India. This study was carried by Mr. Josef

Brinckmann (ITC Consultant) and

submitted to Dept. of AYUSH in

Aug.2008. The study covers various topics

like of HS code classification, Regulatory

Status, Quality standards and Market

access of different countries pertaining to

Ayurvedic, Siddha, Unani and Herbal

Products. The countries of focus were

Australia, Belgium, Canada, Denmark,

European Union, Malaysia, South Africa,

UK and USA. The report gives

comprehensive web links of regulatory

guidelines and data bases of respective

countries in respect of products for the

study. Further need assessment study was

carried with questionnaire based

enterprise survey with Pharmexcil &

ADMA members. A total of 13 survey

responses were received by the consultant.

Based on these responses and findings

from other enterprise interviews during

visits to India various needs in the area of

export promotion pertaining to financial,

market intelligence, regulatory affairs,

sales & marketing needs were identified.

The report ends with priority objective

which identifies “What do the Indian

enterprises need to do?” and “What does

the Government of India need to do?”

Pharmexcil has studied the complete

report and prepared a Summary of the


31

same for easy reference of the important

content in the report. Summarized report

can be accessed at http://pharmexcil.com/data/uploads/Summary%

20Report%20on%20ITC%20Paper%20by%20Pha

rmexcil.doc and complete report http://pharmexcil.com/data/uploads/ITC-

Joseph_Brinkman.pdf

4. ANDA approvals received by Indian pharmaceutical companies in August 2009 About 33% of total ANDA approvals granted by USFDA in August 2009 are for India based generic pharmaceutical companies

US. FDA ANDA Approval to Indian Pharmaceutical Companies during the month of August 2009

S. No

Company Active Ingredient Marketing

Status Dosage

form Strength

1 Aurobindo Pharma Ltd Carisoprodol Prescription Tablet; Oral 350MG

2 Ranbaxy Laboratories Ltd Sumatriptan Succinate Prescription Tablet; Oral EQ 25MG BASE ; EQ 50 MG BASE

3 Dr Reddy’s Laboratories Ltd Sumatriptan Succinate Prescription Tablet; Oral

EQ 25MG BASE ; EQ 50 MG BASE; EQ 100MG BASE

4 Orchid Chemicals & Pharmaceuticals Ltd Sumatriptan Succinate Prescription Tablet; Oral


5 Sun Pharmaceutical Industries Ltd Sumatriptan Succinate Prescription Tablet; Oral


6 Aurobindo Pharma Ltd Sumatriptan Succinate Prescription Tablet; Oral EQ 25MG BASE ; EQ 50 MG BASE; EQ 100MG BASE

7 Ranbaxy Laboratories Ltd Glycopyrrolate Prescription Tablet; Oral 1MG ; 2 MG8 Unichem Laboratories Ltd Bisoprolol Fumarate Prescription Tablet; Oral 5MG ; 10 MG

9 Aurobindo Pharma Ltd Clindamycin Hydrochloride Prescription Capsule;

Oral

EQ 150MGBASE ; EQ 300MG BASE

10 Unichem Laboratories Ltd Clonidine Hydrochloride Prescription Tablet; Oral 0.1MG ; 0.2MG ;

0.3MG

11 Wockhardt Ltd Cetrizine Hydrochloride Prescription Syrup; Oral 5MG/5ML

Total Number of ANDA approval 34 Total Number of ANDA approval from India 11 (33% of total approvals) Source: Pharmexcil compilation from USFDA website & press releases

5. List of Regulatory Authorities in various countries and their contact details

Pharmexcil has compiled the list of

Regulatory Authorities in various

countries along with their contact details.


32

Members can access this information

from the following link: http://www.pharmexcil.com/v1/aspx/DLogin.aspx?url=../../data/uploads/Contact_details_and_web_link_Drug_Regulatory_Authorities.pdf 6. U.S. Observe significant rise in use of Complementary & Alternative Medicine

In 2007, adults in the United States spent

$33.9 billion out of pocket on visits to

complementary & alternative medicine

(CAM) practitioners and purchases of

CAM products, classes, and materials

[National Health Statistic Report, July

2009]. Nearly two-thirds of the total out-

of-pocket costs that adults spent on CAM

were for self-care purchases of CAM

products, classes, and materials ($22.0

billion). A total of 44% of all out-of-

pocket costs for CAM, or about $14.8

billion, was spent on the purchase of

nonvitamin, nonmineral, natural products.

Adults spent $2.9 billion out of pocket on

the purchase of homeopathic medicine in

2007. Although results are not very

encouraging for Ayurvedic products,

which accounted for $18.8 million, there

exist enormous opportunity for growth.

According to a recent report from

Nutritional Business Journal, Ayurvedic

products registered a highest growth of

13% in 2008 as compared to 9% by

Traditional Chinese medicine. In times to

come CAM usage are poised to increase as

a result of the growing push in the Unites

states for a healthcare system that focuses

on disease prevention rather than disease

treatment because it is cheaper to prevent

disease than to cure it.

Click on the following link for complete report. http://nccam.nih.gov/news/camstats/costs/nhsrn18.pdf

http://pharmexcil.org/check_file_login.php?link=http://pharmexcil.org/data/uploads/contact_details_and_web_link_Drug_Regulatory_Authorities.pdf


33

6. Indian Pharma in Media 1. Dr. Manmohan Singh supports recommendations of Rajiv Kher Task Force to enhance Pharma Exports Prime Minister Dr. Manmohan Singh has

asked the Department of Pharmaceutical

(DoP) to implement the

recommendations of the Rajiv Kher Task

Force which was submitted in March this

year. These recommendations will

enhance pharmaceutical exports and also

reduce the hurdles faced by exporters.

The recommendations include strong

measures to boost the growth of several

key areas like generics production, R&D,

contract manufacturing, drug discovery &

clinical trials, and Indian system of

medicines and Ayush.

Prioritized funding by institutions such as

EXIM Bank through Special Purpose

Vehicles (SPVs) also featured in the

recommendations. In order to promote

R&D the task force recommended

commercial R&D firms that are promoted

by established firms should be allowed tax

holidays. Other recommendations in this

direction include commercializing

technologies and public private initiatives

in R&D.

The Rajiv Kher (joint secretary in the

Union Ministry of Commerce) task force

focuses exclusively on pharmaceutical

exports and its recommendation were

consolidated only after various rounds of

discussion between various stakeholders

in the pharmaceutical industry and

government officials.

2. DoP Aims at Setting up Pharma and Medical Devices Clusters As one of the projects under Phase I of

Pharma India Vision 2020, the

Government of India, with the help of

Department of Pharmaceuticals (DoP),

Ministry of Chemicals and Fertilisers is

likely set up two pharma clusters, a

Pharma City, a vaccine development

centre and four R&D hubs in the country.

This is to boost the growth of the Indian

pharmaceutical sector. The first phase of

the project will start in Andhra Pradesh by

setting up of a Pharma City which will be

a major R&D and manufacturing hub.

The centre is also looking at Mumbai,

Pune, Kolkata and Chennai to establish

R&D hubs.

United Nation’s South-South Centre and

the government plan to set up Pharma

hubs for clean technology and clean


34

technology demonstration systems in

Gujarat and Tamil Nadu wherein specific

investments will be put in by the DoP, the

UN and the related state government.

This proposal is yet to be discussed.

DoP is also considering discussions with

MNCs to start vaccine development units;

this will be either as an exclusive

partnership with a MNC or a joint

mission with more than one company. A

medical devices cluster is also proposed to

be established in Gujarat to support the

growing medical devices sector in the

country.

3. Tax Sops for Exporters sought in the New Foreign Trade Policy by Pharmexcil Mr. Venkat Jasti, Chairman, Pharmexcil

along with other Pharmexcil members, in

a meeting with the Board of Trade, which

is an advisory to the Government of India

on India’s foreign trade related policies,

has submitted a request for exemption of

service tax on pharmaceutical exports

under the new foreign trade policy.

For the Small and Medium Enterprises

(SME) in exports; for Registration,

Evaluation, Authorization and restriction

of Chemicals (REACH); and for

registration of exports of a few chemicals

and intermediates to the EU, the

Pharmexcil has requested the Board to set

up a Rs. 1,000 crores fund.

For encouraging exports, Pharmexcil has

also asked to extend 150 % average

reduction in duties on R&D activities for

export purposes.

4. Spurious drugs significantly less in Indian Pharma Market According to a survey undertaken by

DCGI, the number of spurious drugs in

Indian market is as low as 10 drugs in a

sample of 24,000. Although the official

announcement is awaited, the survey has

laid all the rumors regarding the presence

of fake drugs to rest.

The details of the survey remain

undisclosed, the ministry sources indicate

that east zone leads the list of spurious

drugs; out of 7,000 samples, 7 drugs were

found spurious. In the North zone 2 out

of 4,500 samples was spurious and only

one out of 5,500 samples in the West

zone.

A survey of this magnitude is one of its

first kind in India, it includes 62 popular

drugs from 9 therapeutic categories

including anti-tuberculosis, anti-allergy

diabetes, cardiovascular, anti-infectives,


35

anti-malarials, NSAIDs, anti-histamine

and multi-vitamin preparations.

5. DCGI reworking on approval timelines; aims at prompt disposal of pending applications The approval timelines are being revised

by the Drug Controller General of India

(DCGI). Efforts are being made to

streamline the approval process especially

on the pending cases filed prior to January

1, 2009. The timelines fixed for the

approvals will be calculated excluding the

weekend holidays.

In July, DCGI set timelines of two weeks

for applications related to Export No

Objection Certificate; three weeks for dual

use, rule 37 and neutral code; and four

weeks for additional indication and similar

applications. A six weeks timeline was

fixed for first response to new drug

applications, Fixed Dose Combinations

and bioequivalence studies for export

purposes. The revised timelines are meant

to accelerate the disposal of pending files.

The DCGI has communicated to the

applicants who have submitted approvals

prior to the beginning of this year, to

represent their cases to the authority by

September 10, 2009. The applicant should

produce the latest status of the pending

case along with the diary number of the

application.

6. India and Nigeria Join Hands to Promote the usage of Indian Generics in Africa In the wake of fake drugs seizure in

Nigeria with ‘made in India’ labels (later

discovered as being from China), India

has agreed to help Nigeria in its battle

against spurious drugs. Towards that end

India will help Nigeria in setting up bio-

availability and bio-equivalence study

centers.

Dr Paul Orhii, Nigeria’s Director General

of National Agency for Food and Drug

Administration and Control (NAFDAC)

held extensive meetings with the Indian

government officials. He expressed his

confidence in the Indian generics with

respect to cost and quality but also

mentioned that the lack of facilities that

assess the quality of imported drugs has

posed a challenge in adopting Indian

made medicines. Hence, Nigeria has

sought India’s help in creating awareness

programs to enhance the adoption of

Indian medicines and also work towards a

better regulatory and legislative

framework in Nigeria.


36

7. China Accepts the Nigerian Fake drugs cargo, promises to act tough The Nigerian Government had

confiscated a fake drugs cargo with “made

in India” labels on them. This is believed

to have originated from China. The anti-

malarial generic drugs that were

confiscated possessed the names and

addresses of the Chinese manufacturers.

NAFDAC (National Agency for Food

and Drug Administration and Control) of

Nigeria claims that the distribution of

these drugs could have affected 642,000

adults.

India expressed its disappointment and

urged the Chinese Government to take

strict action against such manufacturers,

as this event is likely to have a significant

impact on India’s pharma exports to

Africa as a whole, which contributes 15%

of India’s total drug exports.

In a similar incident, the Kenyan

Government has also seized medicines

shipped from Shanghai bearing

‘Government of Kenya’ labels. India is

making efforts to ensure quality norms in

order to intercept the movement of such

fake drugs.

8. The Indian HIV Tender Battle Grips Kenyan Medicines Supply Agency (Kemsa) The Kenyan Medicines Supply Agency

(Kemsa) which procures medicines for

public health facilities had earlier refused

to accept the tender documents submitted

by the India based globally recognized

pharmaceutical company, Hetero Drugs

Ltd (Hetero). The reason behind this is

the submission of scanned pricing

schedule submitted by Hetero Drugs

instead of original documents.

The High Court has allowed Kemsa’s

application to review its decision to

reopen its tender process for the

procurement of anti-retrovirals worth $12

million. Hetero applied for tenders for six

products in March, but was notified as not

being successful in June.

"It is a matter of procedure. These

documents need to be verified and

authenticated. That is why they were

rejected," said David Muttu, procurement

manager at the procurement and supply

management consortium of Kemsa. The

companies that won the HIV bids were all

Indian companies: Cipla won four, worth

$6 million; Ranbaxy won one, worth $3

million; and Emcure won one, worth $2.9

million, according to Muttu.


37

9. Panacea to supply pediatric vaccines to UNICEF Panacea Biotec Ltd wins a three-year

contract worth over Rs 1,067 crore from

UNICEF to provide the EasyFive vaccine

against the five dreaded pediatric diseases

(Diphtheria, Tetanus, Hepatitis B, and

Hemophilus Influenza). This is believed

to be a major growth driver for the

company’s overall performance.

EasyFive is the world’s first fully

pentavalent vaccine and was introduced in

India in 2005. The company has

partnership with WHO and UNICEF to

cater to the developing countries and

enhance the coverage of the vaccine. The

company has also received a pre-

qualification by WHO for Easyfour and

Ecovac vaccine.

10. Vaccine for Swine-flu soon to become a reality in India: WHO granted $2 m to SII The WHO has granted $ 2 m to Serum

Institute of India (SII) to develop and

manufacture a vaccine for swine flu and

seasonal flu. The vaccine should be ready

in two to four months. Although the

vaccine development is underway, the

prevention measures should continue.

Administration of Tamiflu is restricted

only in confirmed cases and until such

time that vaccines are made available.

Thailand and Indonesia remain the worst

affected south East Asian regions with

11,398 cases of swine flu in Thailand and

771 cases in Indonesia.

11. FDA and EMEA Join Hands for Clinical Trial Inspections US FDA and EMEA have initiated a pilot

program to share information on good

clinical practice (GCP) inspections. This

initiative will ensure that there is

uniformity in conducting clinical trials

submitted in marketing applications in the

US and the EU.

EMEA executive director Thomas

Lönngren said that the initiative "marks an

important step to the building of a global

regulatory network for supervision of

clinical trials. By working together in a

collaborative and synergistic manner GCP

inspection resources can be used more

efficiently."

"The clinical development of medicines is

a global undertaking," FDA drugs centre

director Dr Janet Woodcock said, "With

limited resources available to address the

global nature of clinical research, this is an

outstanding opportunity for the FDA and

the EMEA to work together to carry out

inspections and share information."


38

Under the 18-month pilot program, which

will commence in September, products

that are regulated by FDA’s drug centre

and EMEA will be covered. This will be

done under the FDA-EMEA

confidentiality agreement.

The three main objectives under this

initiative are: to conduct periodic

information exchanges; to conduct

collaborative inspections; and to share

information on interpretation of GCPs.

The program will help in regulating the

clinical trial process by relevant GCP

inspection by which the selection of

studies and sites is well informed. The

regulators shall follow best practices on

GCP inspections and the resultant

feedback will be communicated to each

other by the regulators when the clinical

trials are of common interest.

All the inspection procedures, the GCP-

related legislation and regulation

information will be shared by the parties.

After this pilot program, FDA and EMEA

will amend the program as required. The

agencies are also looking for sponsors

who are willing to participate voluntarily

in a collaborative inspection.

12. Jordan initiates steps to create its space in the global pharmaceuticals arena The USAID Jordan Economic

Development Program (SABEQ) along

with the Jordanian Association of

Pharmaceutical Manufacturers (JAPM)

has launched workshops to raise

packaging standards and establish GMP to

enhance its exports to flourishing markets.

The workshop also aims at lessening the

supply-demand gap in the packaging

sector. The key elements of the workshop

are cGMP guidelines, legislations,

inspection models and also receiving

accreditation from International health

authorities.

The secretary general, JAPM Mr. Hanan

Shoul feels that this will certainly enhance

Jordan’s position in the global

pharmaceutical market by increasing

exports, creating more jobs and making

generic medicines available at an

affordable cost for the Jordanian patients.

13. Eli-Lilly is all set to help Russia improve its manufacturing standards Eli Lilly will be providing training for

Rozdravnadzor, the Russian equivalent of

FDA to improve its manufacturing

practices. This will also involve training to

improve the pharmaceutical


39

manufacturing standards and overall

quality control.

Eli Lilly also aims to use this training as a

channel to increase the dialogue between

the regulator and other agencies.

Mr Frank Deane, the president of

manufacturing operations at Lilly said that

this training will enhance the quality of

medicines in Russia, on the other hand it

will also help Lilly to fine tune its training

practices in the US.

The training will take place in

manufacturing simulation facilities at Lilly,

the Chao Center and the PDA (Parenteral

Drug Association) in the US.

14. UK to hold public consultation on Automatic Generic Substitution The UK Department of Health is

planning to hold a public consultation in

the autumn on the issue of automatic

generic substitution. This subject had

figured in the renegotiation of the

Pharmaceutical Price Regulation Scheme

(PPRS) when the department met with the

Association of the British Pharmaceutical

Industry last December, and they had

agreed to consider the possibility of

allowing pharmacists to dispense an

equivalent generic medicine against a

prescription for a branded product.

Norgine is objecting to automatic

substitution, and has funded a report that

calls for public consultation on the subject

and draws attention to some well-known

arguments against substitution, like patient

confusion and variations in bioavailability.

An online petition on the UK

government’s number10.gov.uk website

has collected nearly 8,700 signatures.

The Department of Health says: "This is a

complex issue with many interested

stakeholders. We want to make sure we

engage with all stakeholders in the best

way possible and we therefore intend to

formally consult in the autumn on our

proposals for implementation." Provision

would be made for prescribers to opt out

where, in their clinical judgment, they felt

a patient should receive a branded

medicine, and certain categories of

medicines might be excluded from

substitution altogether.

Subject to the outcome of consultations

with the affected parties, automatic

substitution could be introduced in

January 2010.


40

15. Sales of vitamins go up in Brazil whereas dietary supplements sales take a hit after ban of Noni Juice

According to reports, vitamin sales in

Brazil in 2008 have gone up by 11 per

cent in terms of value. Out of this, the

share of multivitamins was the greatest,

with a 14 per cent average annual growth.

This is in stark contrast to the sales of

dietary supplements, which shrank from

an average of 13 per cent to just 2 per

cent. This is perceived to be a direct

fallout after Brazil’s ANVISA – Agência

Nacional de Vigilância Sanitária, or

National Health Surveillance Agency,

Brazil, banned Tahitian Noni juice in

October 2007. ANVISA is Brazil’s

autonomous regulatory agency of the

supplements industry. Noni juice was

banned after claims of certain effects

(analgesic, antiseptic, anti-inflammatory

and anticancer) were not proven, and also

because of reported cases of

hepatotoxicity and renal toxicity. Though

the company obtained a laminar (a

temporary order) to resume sales in

August 2008, the future of Noni juice is

uncertain. Noni juice was launched by

Tahitian Noni International, a subsidiary

of Morinda Holdings, in 1996, and had

sales in the range of $500 million annually.

Tahitian Noni had no comments on the

issue.

Amongst the vitamins, fortified foods,

such as Danoninho and Yakult, or

convalescence products, such as Sustain

Kids are preferred by Brazilian parents for

their children. Vitamin C is the most

popular single vitamin. Bayer and Merck

recently introduced Redoxon and Cewin

brands respectively, which had vitamin C

along with calcium, zinc, glucose and rose

hips. Fish oils, with their blood

cholesterol-lowering and triglycerides-

lowering omega-3 fatty acids, showed the

greatest growth, 22 per cent, while

supplements for the old, like ginkgo

biloba and calcium supplements showed

about 13 per cent growth. Diary products,

such as probiotic yoghurts, have

challenged fiber supplements, with

yoghurt showing a 19 per cent growth in

2007.

Combination products commonly in use

are the mineral combinations (calcium,

magnesium and zinc, or fruit/vegetable

fiber with minerals), but ANVISA

requires them to exhibit safety and

efficacy, and therefore this area has not

seen a lot of investment.


41

16. South Korean Considering More Pricing Reforms

A special task force under the Ministry of

Health, Welfare and Family Affair, South

Korea, is considering reimbursement

pricing reforms for generic and branded

products and modifying the existing

Actual Transaction Price (ATP) system,

which could affect both the domestic and

multinational industry. Final decisions

from the ministry are expected in mid-

October. "One general aim is to reduce

the prices of generics," said I.B. Kim, a

director of the KRPIA, the Seoul-based

association representing multinationals.

"These are now seen as relatively high

compared with branded drugs."

Under changes effected at the end of

2006, the government cuts prices of

original products by 20% upon patent

expiry. First generic prices are then fixed

at 85% of this revised level (i.e., 68% of

the pre-expiry price). Expectedly, the

KPMA, representing the generics-

dominated domestic industry, has voiced

strong concern against this proposal.

The ATP system was introduced in 1999.

It aimed at narrowing the gap between

discounted actual and higher

reimbursement prices, resulting in an

initial price cut of about 31%, thereby

trying to reduce price competition and

cutting irrational prescribing driven by

profiteering. But according to Mr. Kim,

"In reality, however, ATP levels have been

stable since the system was introduced,

falling by only 1% or so a year, compared

with the 5% or more expected by the

government.”

With the present system providing no

incentives for the use of cheaper products,

a revamp is being considered. Foreign

groups have also expressed concern about

the practical implementation of the ATP

system in terms of transparency, price-

reporting accuracy and the influence of

product grouping.

The ministry is also discussing other issues

like pricing of branded drugs, dealing with

unethical business practices, and the

possible exclusion from reimbursement of

selected over-the-counter products.

Precise details of the discussions are being

kept a secret as of now.


42

PHARMACEUTICALS EXPORT PROMOTION COUNCIL (Set up by Ministry of Commerce & Industry, Govt. of India)

To create awareness and confidence

“India as a dependable source of quality generic medicines at affordable prices”

Pharmexcil, with the support of Govt. of India, organizes

INDO-AFRICA PHARMA BUSINESS MEET

25-27th SEPTEMBER 2009 HOTEL MARRIOTT, HYDERABAD

Participating countries

South Africa, Nigeria, Kenya, Ghana, Egypt, Mozambique, Ethiopia, Tanzania, Zambia, Botswana, Algeria, Tunisia, Libya, Benin etc.

Confirmed Participants

DG NAFDAC, Nigeria, 15 other Countries’ senior FDA/Procurement officials, 40 Formulators / importers (Pharma, herbal, medical devices, excipients etc.)

Inauguration by

Sri Anand Sharma, Hon’ble Minister for Commerce & Industry, Govt. of India

(Best Exporters & Patents Awards will be conferred by the Minister on this occasion)

For online Registration, visit our web site www.pharmexcil.com

Registration For Business Meetings & Technical Sessions, Exhibition, Advertisement in

Catalogue and other Sponsorship opportunities, contact us:

[email protected] 040-23735462/66 [email protected],[email protected],[email protected]

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