India to remain as generic medicine supplier in future

Posted AtPharmaBiz

The Indian pharmaceutical industry is well positioned to meet the global challenges and generics will remain the major area of strength for Indian pharma companies in future, according to Davinder Brar, chairman of GVK BioSciences Private Ltd., and former CEO of Ranbaxy Laboratories.

Addressing a seminar on the 'Future of the Indian Pharmaceutical Industry' organised by the Tuffs University in Mumbai, last week, Brar said that though monopolies would happen in India in the new product patent regime, India would be the frontrunner in supplying generic products worldwide. In the generics space, India and China are the current frontrunners. However, India has clear-cut advantages as China is still 4-5 years behind India to understand the global regulatory framework, especially of US and EU markets, and in tapping the $ 50 billion worth drugs coming off patent in near future.

"Apart from this, India has huge opportunities in the field of contract research and contract manufacturing. At present the total global contract research and outsourcing of pharmaceuticals market is valued around US $ 66 billion, which includes a US $13 billion contract research market, US $37 billion contract sales and manufacturing segment and a US $10 billion contract informatics market. Indian companies are operating in all these areas and a target of 10 per cent of this market would help Indian companies to tap about US $ 4-5 billion in the next 4-5 years, since the Indian companies have competitive edge," said Brar.

He noted that Indian pharma companies have not invested much in R&D as we were concentrating on reverse engineering so far. Indian pharma companies should invest more into the research and development segment. Further, there is insufficient interaction between academic institutions and pharma companies. So far our research institutes were confining their activities to publishing scientific achievements in related journals, than proactively tying up with the industry for commercial exploitation. It is high time Indian industry resorts to innovative pharma research and development methods as done by companies in the west.

Brar further noted that the three best things that could happen to the growth of Indian industry was the introduction of process patent regime in the 1970's, introduction of DPCO and extreme orientation of the domestic industry towards exports. The process patent regime ensured Indian companies to deliver drugs at fraction of their cost through reverse engineering skills and that helped the Indian industry to flourish. Price control helped Indian companies to be cost-competitive and to become the cheapest drug manufacturer in the world, though the price control mechanism does not allow surplus funds for the companies, which could be invested in R&D and innovation. Concentration on exports helped India grow as the 13th largest pharmaceutical market. The Indian industry also developed the ancillary industry over the years to develop a self-sufficient model. Now domestic players meet 95 per cent of the current requirements of Indian pharma companies. Supporting the argument, he stated that recent statistics revealed India has about 280 biotech companies and another 180 ancillary suppliers for these companies.

November 16, 2005