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11
INDIA-CIS PHARMA & HEALTH CONFERENCE
MUMBAI3rd MARCH, 2006
Department of Chemicals & PetrochemicalsDepartment of Chemicals & Petrochemicals
Ministry of Chemicals & FertilizersMinistry of Chemicals & Fertilizers
Government of IndiaGovernment of India
22
AgendaAgendaIndia – Overview of India – Overview of
the Countrythe Country
Indian Pharmaceutical Indian Pharmaceutical
IndustryIndustry
India’s Strengths in India’s Strengths in
Pharma SectorPharma Sector
Status of Pharma Status of Pharma
Exports to CISExports to CIS
44
India – Largest democracy in the worldIndia – Largest democracy in the world
Gained independence in 1947Gained independence in 1947
Current population over 1 billionCurrent population over 1 billion
English is the language of businessEnglish is the language of business
44thth largest economy globally on PPP basis largest economy globally on PPP basis
66thth largest energy consumer largest energy consumer
Predicted by Goldman Sachs to be the 3Predicted by Goldman Sachs to be the 3rdrd
largest economy in the world by 2050largest economy in the world by 2050
55
India finds harmony – Even with all its India finds harmony – Even with all its diversitydiversity
29 states & 6 UTs with 22 official languages29 states & 6 UTs with 22 official languages
3.3 million square kilometers area3.3 million square kilometers area
Religions: 81% Hindus, 12% Muslims, remaining Religions: 81% Hindus, 12% Muslims, remaining
are Christians, Sikhs, Jains, Buddhists, Parsis, are Christians, Sikhs, Jains, Buddhists, Parsis,
JewsJews
Per capita income ~US$ 750Per capita income ~US$ 750
GDP ~ US$ 650 billionGDP ~ US$ 650 billion
66
INDIA RISINGINDIA RISING
GDP growth rate – 8.1% (twice that of USA & UK)GDP growth rate – 8.1% (twice that of USA & UK)
Manufacturing sector growth rate – 9.4%Manufacturing sector growth rate – 9.4%
Exports growth rate – 23 ( compounded growth rate Exports growth rate – 23 ( compounded growth rate
over last 10 years)over last 10 years)
Inflation Rate - 4.1 % (5% a year ago)Inflation Rate - 4.1 % (5% a year ago)
Credit growth- ~25% (22% last year)Credit growth- ~25% (22% last year)
Foreign Exchange Reserve - US $ 142 billion (1991-US $ Foreign Exchange Reserve - US $ 142 billion (1991-US $
5.8 billion)5.8 billion)
Some IndicatorsSome Indicators
77
Capital MarketCapital MarketEquity Index at the highest level ever close to Equity Index at the highest level ever close to
10500 (BSE)10500 (BSE)
India’s market capitalisation US$ 550 billion India’s market capitalisation US$ 550 billion
Registered FIIs – 667Registered FIIs – 667
This Year’s flow of portfolio investment- US $ 10 This Year’s flow of portfolio investment- US $ 10 billionbillion
Volume of public issues rose by 5 times in 2005Volume of public issues rose by 5 times in 2005
Introduction of book-building processIntroduction of book-building process
88
RECENT FISCAL REFORMSRECENT FISCAL REFORMS
Income Tax simplified - 10%, 20% and 30% ratesIncome Tax simplified - 10%, 20% and 30% ratesCorporate Tax rate - Reduced to 30% from 35%Corporate Tax rate - Reduced to 30% from 35%Peak Import Duty on non-agricultural items Peak Import Duty on non-agricultural items
reduced from 15 to 12.5 % reduced from 15 to 12.5 % Import duty on specified Capital Goods Import duty on specified Capital Goods
(including those for Pharma & biotech. Sector) - (including those for Pharma & biotech. Sector) - 5%5%
Import duty on IT items (217) – NilImport duty on IT items (217) – NilState Value Added Tax - introduced w.e.f. 1st State Value Added Tax - introduced w.e.f. 1st
April 2005 (4% rate for pharma)April 2005 (4% rate for pharma)
99
Some of the world’s best academic and Some of the world’s best academic and healthcare institutes are in Indiahealthcare institutes are in India
14,000 hospitals14,000 hospitals
700,000 hospital beds (85% urban)700,000 hospital beds (85% urban)
More than 500,000 doctorsMore than 500,000 doctors
737,000 nurses737,000 nurses
171 medical colleges171 medical colleges
17,000 medical graduates/year (MBBS/MD)17,000 medical graduates/year (MBBS/MD)
300 life sciences colleges produce over 300 life sciences colleges produce over
700,000 graduates annually700,000 graduates annually
1111
Indian Pharma Industry ProfileIndian Pharma Industry Profile
Number of companiesNumber of companiesLarge : 300Large : 300SMEs : 6000SMEs : 6000
According to Mckinsey & Co., Indian According to Mckinsey & Co., Indian pharma market to be US$ 25 billion by pharma market to be US$ 25 billion by 2010, out of which US$ 11 billion to be 2010, out of which US$ 11 billion to be domestic salesdomestic sales
PHARMEXCIL formed to facilitate exports PHARMEXCIL formed to facilitate exports of pharmaceuticals and related matters-of pharmaceuticals and related matters-plan to set up warehouse facility in Russia plan to set up warehouse facility in Russia
1212
Worth US$ 8 billion ; globally # 4 in volume, # 13 in value Worth US$ 8 billion ; globally # 4 in volume, # 13 in value
Exports of US$ 3.7 billion in FY 2004, increasing @ Exports of US$ 3.7 billion in FY 2004, increasing @ 22.9% CAGR 1994-2003 years.22.9% CAGR 1994-2003 years.
India among top-5 bulk manufacturers and top-20 India among top-5 bulk manufacturers and top-20 exporters world-wideexporters world-wide
India now files highest number of DMF’s India now files highest number of DMF’s
India has largest number of US FDA approved plants India has largest number of US FDA approved plants outside US.( 75 now)outside US.( 75 now)
US Pharmacoepia INDIA office opened at Hyderabad -US Pharmacoepia INDIA office opened at Hyderabad -first such office ouside USAfirst such office ouside USA
Domestic market growing at 8-10% p.a.Domestic market growing at 8-10% p.a.
R&D spending to increase from 5% of sales to 8% by R&D spending to increase from 5% of sales to 8% by 20072007
Indian Pharma Industry Profile Indian Pharma Industry Profile contd.contd.
1313
India: The Pharma Outsourcing HubIndia: The Pharma Outsourcing Hub
India – emerging as the hub for India – emerging as the hub for Collaborative & contract research Collaborative & contract research Contract manufacturing Contract manufacturing Co-developmentCo-developmentCo-marketingCo-marketing
Cost of developing an NCE – over US$ 1 billion Cost of developing an NCE – over US$ 1 billion whereas, in India it can be as less as US$ 50 millionwhereas, in India it can be as less as US$ 50 million
Several MNCs like Pfizer, Merck, GSK, Roche, Bayer, Several MNCs like Pfizer, Merck, GSK, Roche, Bayer, Aventis, etc. making India a hub for APIs and bulk Aventis, etc. making India a hub for APIs and bulk suppliessupplies
Pfizer, Eli Lilly, Novartis carrying out clinical trials in Pfizer, Eli Lilly, Novartis carrying out clinical trials in IndiaIndia
1414
Several CROs (about 22) like Quintiles, Simbee, Several CROs (about 22) like Quintiles, Simbee, RCC, Omnicare, etc. set up liaison/marketing RCC, Omnicare, etc. set up liaison/marketing offices in India offices in India
Indian CROs commenced trials since 1996Indian CROs commenced trials since 1996
Cos. like GSK Biological lined up global trial of Cos. like GSK Biological lined up global trial of 4 vaccines in India during 2005. Also clinical 4 vaccines in India during 2005. Also clinical R&D for AIDS, dengue, malaria, TB vaccinesR&D for AIDS, dengue, malaria, TB vaccines
India: The Pharma Outsourcing Hub India: The Pharma Outsourcing Hub contd.contd.
1515
Regulatory FrameworkRegulatory Framework
Drugs and Cosmetics Act, 1940 – a Central Act Drugs and Cosmetics Act, 1940 – a Central Act to regulate manufacture/ import/sale of drugsto regulate manufacture/ import/sale of drugs
New drugs, imports, clinical trials, drug New drugs, imports, clinical trials, drug standards approved by Central Govt. standards approved by Central Govt. Enforcement by StatesEnforcement by States
Drug (Price Control) Order, 1995 – for control of Drug (Price Control) Order, 1995 – for control of prices of specified drugsprices of specified drugs
Indian Patents Act, 1970 – As on 1Indian Patents Act, 1970 – As on 1stst January, January, 2005 provides product patent for drugs, food 2005 provides product patent for drugs, food and agro-chemicals and agro-chemicals
1616
Some Recent Changes in Drugs & Some Recent Changes in Drugs & Cosmetics Act and RulesCosmetics Act and Rules
Schedule “Y” amended for multi-centric Schedule “Y” amended for multi-centric concurrent clinical trials as per GCPconcurrent clinical trials as per GCP
GMP – realigned as per international guidelines GMP – realigned as per international guidelines (particularly WHO & OECD) (particularly WHO & OECD)
GCP – India’s requirements on GCP published GCP – India’s requirements on GCP published as guidelinesas guidelines
GLP – monitoring authority set up for pre-GLP – monitoring authority set up for pre-clinical (toxicological) studiesclinical (toxicological) studies
Registration system streamlined for import of Registration system streamlined for import of drugs – both site and product registrationdrugs – both site and product registration
1717
Process Patents for pharmaceuticals Process Patents for pharmaceuticals introduced in 1970introduced in 1970
Prior to 1970Prior to 197085% market with foreign companies85% market with foreign companies15% market with domestic companies15% market with domestic companies
1970 – Process Patent introduced for 1970 – Process Patent introduced for pharmaceuticalspharmaceuticals
At presentAt present85% market with domestic companies85% market with domestic companies15% market with foreign companies15% market with foreign companies
1919
Indian Pharma Industry: Strengths - Policies Indian Pharma Industry: Strengths - Policies
Product Patent regime in effect from January 1, Product Patent regime in effect from January 1, 20052005
Pro-business, Pro-IP Government – federal, state Pro-business, Pro-IP Government – federal, state & city& city
India bio/pharma clusters make it easy to set-up India bio/pharma clusters make it easy to set-up and conduct businessand conduct business
Effective Check on spurious drugs- new law Effective Check on spurious drugs- new law being made being made
2020
Rich bio-diversityRich bio-diversity
Well-developed pharmaceutical, chemical & Well-developed pharmaceutical, chemical & healthcare industrieshealthcare industries
Complex capabilities in research, synthesis & Complex capabilities in research, synthesis & manufacturingmanufacturing
Quality conscious (cGMP, GLP, ISO)Quality conscious (cGMP, GLP, ISO)
CSIR= World renowned 42 national research CSIR= World renowned 42 national research laboratorieslaboratories
Huge patient populationHuge patient population
Information technology = core competenceInformation technology = core competence
Indian Pharma Industry: Strengths - Indian Pharma Industry: Strengths - Infrastructure Infrastructure
2121
Cheaper labour (cost to hire a Ph.D. scientist = Cheaper labour (cost to hire a Ph.D. scientist = US$ 25K; as against US$ 65K/year in the US)US$ 25K; as against US$ 65K/year in the US)
Employers receive loyalty, respect, dedication Employers receive loyalty, respect, dedication & admiration from employees& admiration from employees
40% cheaper to set up a plant in India than in 40% cheaper to set up a plant in India than in the US/EUthe US/EU
35-40% cost savings for conducting clinical 35-40% cost savings for conducting clinical trials in Indiatrials in India
Funds available for expansion and start-upsFunds available for expansion and start-ups
Indian Pharma Industry: Strengths - Cost Indian Pharma Industry: Strengths - Cost
2222
Huge pool of experienced scientific manpower Huge pool of experienced scientific manpower – fluent in English– fluent in English
Employees work 6 days/week & are willing to Employees work 6 days/week & are willing to work in all shiftswork in all shifts
Reverse brain-drain : Non-resident Indian Reverse brain-drain : Non-resident Indian scientific personnel moving backscientific personnel moving back
New breed of managers (no longer family-run New breed of managers (no longer family-run businessesbusinesses
Strong entrepreneural nature = CompetitionStrong entrepreneural nature = Competition
Indian Pharma Industry: Strengths - Talent Indian Pharma Industry: Strengths - Talent
2323
India is a proven source of quality and India is a proven source of quality and cost-effective pharma materialscost-effective pharma materials
Fine chemicalsFine chemicals
IntermediatesIntermediates
Advanced intermediatesAdvanced intermediates
APIs (Active Pharmaceutical Ingredients)APIs (Active Pharmaceutical Ingredients)
FormulationsFormulations
2424
Highest number of US FDA approved Plants Highest number of US FDA approved Plants outside the US are in Indiaoutside the US are in India
0
10
20
30
40
50
60
70
India Italy Spain China Israel
US FDA Approved Plants Outside the US
Source:FDA & Proximare
2525
Indians filed the highest number of DMFs : Indians filed the highest number of DMFs : 871% growth since 1987871% growth since 1987
0
20
40
60
80
100
120
140
1969-85
1990 1995 2000 2001 2002 2003Source:FDA & Proximare
2727
Exports of Drugs, Pharmaceuticals, and Exports of Drugs, Pharmaceuticals, and Fine ChemicalsFine Chemicals
Major Destinations in CISMajor Destinations in CISCountry Country 2003-042003-04
($ million)($ million)
2004-052004-05
($ million)($ million)
Share of Dosage Share of Dosage Forms (%)Forms (%)
2004-052004-05
RussiaRussia 146146 164164 9494
UkraineUkraine 4747 7373 9090
KazakistanKazakistan 1111 1515 9292
AzerbijanAzerbijan 22 99 9898
UzbekistanUzbekistan 44 66 8989
BelarusBelarus 44 66 8989
TurkmenistanTurkmenistan 22 33 8989
KyrgystanKyrgystan 11 33 100100
GeorgiaGeorgia 11 22 9494
TazikistanTazikistan 11 11 9191
All figures rounded All figures rounded of 1$ = Rupees 44of 1$ = Rupees 44
2828
India – world’s supplier of ARV drugs (Anti- India – world’s supplier of ARV drugs (Anti- HIV/AIDS) HIV/AIDS)
About 50% of the ARV drugs being exported to About 50% of the ARV drugs being exported to
developing countries from India – substantial developing countries from India – substantial
exports to Africaexports to Africa
Indian companies instrumental in drastic Indian companies instrumental in drastic
reduction in ARV drug prices from over US$ reduction in ARV drug prices from over US$
10,000 per head/annum to US$ 150 per 10,000 per head/annum to US$ 150 per
head/annum head/annum
2929
CIS PHARMA MARKET (CIS PHARMA MARKET (INCLUDING RUSSIA)INCLUDING RUSSIA)
US$ 7 billion - Share of Indian exports only 3 to 4% (aroud US$ 7 billion - Share of Indian exports only 3 to 4% (aroud $ 275 million) - Great scope to enhance exports from India $ 275 million) - Great scope to enhance exports from India
India can help CIS to meet their health care needs in a India can help CIS to meet their health care needs in a cost effective manner and cater to larger section of cost effective manner and cater to larger section of populationpopulation
Joint Ventures possible provided certain issues like Joint Ventures possible provided certain issues like convertibility to dollar mode are sorted out in some convertibility to dollar mode are sorted out in some countriescountries
Fast track registeration for Indian medicines would be Fast track registeration for Indian medicines would be helpfulhelpful
3030
Areas for India-CIS collaborationAreas for India-CIS collaborationSourcing of APIs & formulations from IndiaSourcing of APIs & formulations from IndiaCollaborations for manufacturing & marketing of drugs-Indian Collaborations for manufacturing & marketing of drugs-Indian
companies are very strong in all therapeutic groups especially companies are very strong in all therapeutic groups especially in diabetic , respiratory, neuro, antiinfective and in diabetic , respiratory, neuro, antiinfective and cardiovascular groups and they can meet the requirements of cardiovascular groups and they can meet the requirements of CIS countries in a cost effective mannerCIS countries in a cost effective manner
Joint R&D work for pharmaceuticals Joint R&D work for pharmaceuticals Training of drug regulators at NIPERTraining of drug regulators at NIPERCooperation for use of various testing facilities at NIPER with Cooperation for use of various testing facilities at NIPER with
respect to quality control/quality assurance, bio-availability , respect to quality control/quality assurance, bio-availability , impurity profiling ,toxicology etc.impurity profiling ,toxicology etc.
Participation in INDIACHEM 2006 in Mumbai from 8-10 Participation in INDIACHEM 2006 in Mumbai from 8-10 November, 2006November, 2006
3131
The Indian Government and Industry would The Indian Government and Industry would welcome partnerships with CIS countries in welcome partnerships with CIS countries in
providing access to affordable, quality providing access to affordable, quality medicines medicines
ConclusionConclusion