Published on March 13, 2014
Changing trends in Indian Pharmaceutical Industry - Rishang Deoras
Indian Pharmaceutical Evolution Phase II Government Control Domestic Indian market- key driver Indian Patent Act – 1970 Drug prices capped Local companies begin to make an impact Phase III Development Phase Bulk drug & formulation manufacturing Process development Production infrastructure creation Export initiatives Phase IV Growth Phase Bulk drug exports to developing Markets TRIPS agreement signed in 1995 Rapid expansion of domestic market International market development Research orientation Phase V Innovation & Research New IP law Discovery Research Gearing up for changing patent law Step towards NCE development CRAM 1970 1980 1990 2000 2011 Phase I Early Years Market share domination by foreign companies Relative absence of organized Indian companies Pre-1970’s
India’s Competitive Advantage India Economical Skilled Manpower World Class Manufacturi -ng Facilities Quality at Low Price Vibrant Domestic Industry Talent Pool Source : Mckinsey study; Economic Times Significant Cost Advantage Highest number of USFDA approved plants 0.015 0.31 0.56 0 0.1 0.2 0.3 0.4 0.5 0.6 Indian Retail Price US Generic Price US Brand Price Price ($) Promethazine 61 60 25 22 9 5 7 0 10 20 30 40 50 60 70 No. of USFDA Approved Plants Indian Pharmaceutical industry Valued at $22 Billion 3rd Largest in terms of Volume 13th in terms of Value Growth Rate : 14% Per Annum 2nd most populous country in the World with current population 1.22 Billion
TRIPS : The Paradigm Shift EMR • Exclusive Marketing Rights Patents • Product • Processes Others • Compulsory Licenses • Uniformity TRIPS Innovation Reverse Engineer ing TRIPS Strong IPR in Place to Protect & Nurture Innovation Synriam Arterolane Maleate and Piperaquine Phosphate
New Pricing Policy : A Step towards transforming India Drug Policy (1994) Based on market share principle Cost-Based Pricing National Pharmaceutical Pricing Policy 2012 Based on NLEM essentiality of drugs Proposed to cover all 348 drugs Market-Based Pricing Based on Simple Avg of all brands with market share >1% NPPP likely to result in 10-15% price cuts Impact on industry to the extent of 3-5% Impact likely to be higher on companies with premium pricing strategy, especially MNCs & companies with relatively higher product/therapeutic concentration Impact : Source : ICRA Report Oct’12 ; Economic Times Boost ‘Affordability & Availabilty’ Imported Medicines which are part of NLEM list for the 1st time under policy’s purview. Eg : Prices of Insulin Price control over drugs was first introduced in the country in the aftermath of Chinese aggression by Drugs (Display of Prices) Order 1962 and the Drugs(Control of Prices) Order 1963.
MCI & CBDT break the enduring ‘Drs & Pharma Co’s Nexus’ Indian Medical Council Regulations 2009 : Regulations laid by Medical Council of India banning doctors and their associations from accepting freebies Recent Landmark Move by Finance Ministry : Pharma Co’s Freebies to docs taxable for both Freebies include money, travel facilities, hospitality, etc Impact : Ethical practices would increase Medico Marketing is the future Branding would be pivotal in Business generation
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