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Fostering ‘Innovation’ and protecting of ‘Public Health Interest’: A formidable task for the new TF (taskforce)

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‘The Lancet’, March 19, 2011 in its article titled “India: access to affordable drugs and the right to health”, where the authors reiterated:

‘The right to health is a fundamental right in India, judicially recognized under article 21 of the Constitution…Access to affordable drugs has been interpreted to be a part of right to health’.

Keeping in view of this ‘fundamental right’ of the citizens, public health related issues will continue to be treated as a subject of ‘Public Interest’ in the country.

At the same time, no one can wish away the fact that unmet medicinal needs of the ailing patients can only be met through discovery of innovative drugs. Hence, an innovation friendly ecosystem must necessarily be created in the country, simultaneously. This throws open the dual challenge to the government in the healthcare space of the nation – charting an appropriate pathway to foster a climate for innovation and at the same time protecting ‘Public Health Interest’ of its citizens.

The recent admirable response of the Ministry of Health:

Considering this dual healthcare related needs of the country, on March 15, 2011, Mr Ghulam Nabi Azad, the Minister of Health and Family Welfare, announced the formation of a 12-member task force that will evolve the following strategies under the chairmanship of V.M. Katoch, Secretary, Department of Health Research and Director-General, ICMR and will submit its report within three months.

  1. Evolving a short, medium and long-term policy and strategy to make India a hub for drug discovery, research and development.
  2. Evolving strategies to further the interests of Indian pharma industry in the light of issues related to intellectual property rights and recommend strategies to capitalise the opportunity of $60 to $80 billion drugs going off-patent over the next five years.
  3. Evolve policy measures to assure national drugs security by promoting indigenous production of bulk drugs, preventing takeover of Indian pharma industry by multi-national corporations, drug pricing, promotion of generic drugs
  4. Recommend measures to assure adequate availability of quality generic drugs at affordable prices.

Indian Pharmaceutical Industry is on a growth spree:

The pharmaceutical industry of India is currently playing a key role in promoting and sustaining development in the healthcare space of India. Due to significant cost arbitrage, educated and skilled manpower and cheap labor force among others, the industry is set to establish itself as a global force to reckon with, especially in the areas of generic formulations business, Contract Research and Manufacturing Services (CRAMS).

Estimates and Perspectives:

  • The pharma industry is growing at around 1.5-1.6 times the Gross Domestic Product growth of India
  • Currently, India ranks third in the world in terms of volume of manufacturing pharmaceutical products
  • The Indian pharmaceutical industry is expected to grow at a rate of around 15 % till 2015
  • The retail pharmaceutical market in India is expected to cross US$ 20 billion by 2015
  • According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling patented drugs in India by 2015
  • The number of pharmaceutical retailers is estimated to grow from 5.5 lakh to 7.5 lakhs by 2015
  • At least 2 lakh more pharma graduates would be required by the Indian pharmaceutical industry by 2015
  • The Indian drug and pharmaceuticals sector attracted foreign direct investment to the tune of US$ 1.43 billion from April 2000 to December 2008 (Ministry of Commerce and Industry), which is expected to increase significantly along with the policy reform measures and increased Government investment (3%-4%) as a percentage of GDP towards healthcare, by 2015
  • The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical sector
  • Due to low cost of R&D, the Indian pharmaceutical off-shoring industry is expected to be a US$ 2.5 billion opportunity by 2012

Key growth drivers: Local and Global:

Local:

• Rapidly growing middle class population of the country with increasing disposable income.
• High quality and cost effective domestic generic drug manufacturers are achieving increasing penetration in local, developed and emerging markets.
• Rising per capita income of the population and inefficiency of the public healthcare system will encourage private healthcare systems of various types and scales to flourish.
• High probability of emergence of a robust healthcare financing/insurance model for all strata of society.
• Fast growing in Medical Tourism.
• Evolving combo-business model of global pharmaceutical companies with both patented and generic drugs is boosting local outsourcing and collaboration opportunities.
Global:
Global pharmaceutical industry is going through a rapid process of transformation. The moot question to answer now is how the drug discovery process can meet the unmet needs of the patients and yet remain cost effective.

Cost containment pressure due to various factors is further accelerating this process. CRAMS business, an important outcome of this transformation process, will be the key growth driver for many Indian domestic pharmaceutical players in times to come. 

Key Challenges:

Like all other industries, Pharmaceutical Industry in India has its own sets of Challenges and opportunities under which it operates. Some of the challenges the industry faces are:

  • Unfortunate “Trust Deficit” between the Government and the Industry, especially in pharmaceutical pricing area
  • Regulatory red tape and lack of initiative towards international harmonization
  • Inadequate infrastructure and abysmal public delivery system
  • Lack of adequate number of qualified healthcare professionals
  • Inadequate innovation friendly ecosystem to encourage R&D
  • Myopic Drug Policies have failed to deliver. The needs of over 350 million BPL families who cannot afford to buy any healthcare products and services, have not been effectively addressed, as yet
  • Inability of the government to address the critical issue of ‘80% out of pocket expenditure’ of the common man towards healthcare
  • Inadequate Public Private Partnership (PPP) initiatives in most of the critical areas of healthcare

Job Creation:

Pharmaceutical sector in India has created employment for approximately 3 million people from 23,000 plus units. Accelerated growth in job creation, will not only open up more opportunities to pharmaceutical professionals, but will also fuel growth opportunities in allied business segments like Laboratory, Scientific instruments, Medical Devices and Pharma machinery manufacturing sectors.

Despite all these, it is worth noting that the Indian pharmaceutical industry is confronting with a major challenge in getting employable workforce with the required skill sets. This issue will grow by manifold, as we move on, if adequate vocational training institutes are not put in place on time to generate employable workforce for the industry.

Government Initiatives are inadequate:

The government of India has started working out some policy and fiscal initiatives, though grossly inadequate, for the growth of the pharmaceutical business in India. Some of the measures adopted by the Government are follows:

  • Pharmaceutical units are eligible for weighted tax reduction at 175% for the research and development expenditure obtained.
  • Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government.
  • The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research
  • The Department of Pharmaceuticals is mulling the creation of drug research facilities which can be used by private companies for research work on rent

Encouraging Pharmaceutical Export:

In the recent years, despite economic slowdown being witnessed in the global economy, pharmaceutical exports in India have registered an appreciable growth. Export has emerged as an important growth driver for the domestic pharmaceutical industry with more than 50 % of their total revenue coming from the overseas markets. For the financial year 2008-09 the export of drugs is estimated to be around US $8.25 billion as per the Pharmaceutical Export Council of India (Pharmexil). A survey undertaken by FICCI reported 16% growth in India’s pharmaceutical export during 2009-2010.

Five ‘Strategic Changes’ envisaged:
Five new key strategic changes, in my view, will be as follows:
1. As the country will move towards an integrated and robust healthcare financing system:
• Doctors will no longer remain the sole decision makers for the drugs that they will prescribe to the patients and also the way they will treat the common diseases. Healthcare providers/ medical insurance companies would play a key role in these areas by providing to the doctors well thought out treatment guidelines. • Tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable for a significant proportion of the products that the pharmaceutical companies will sell related to these areas.

• Health Technology Assessment (HTA) or outcome based pricing will play an important role in pricing a healthcare product.
2. An integrated approach towards disease prevention will emerge as equally important as treatment of diseases.
3. A shift from just product marketing to marketing of a bundle of value added comprehensive disease management processes along with the product will be the order of the day
4. More affordable innovative medicines will be available with increasing access to a larger population, as appropriate healthcare financing model is expected to be in place.

5. Over the counter medicines, especially originated from rich herbal resources of India, will curve out a larger share of market, as appropriate regulations will be put in place.

Conclusion:

With the all these evolving trends in the healthcare sector of India, the ball game of the successful domestic Indian pharmaceutical industry is expected to undergo a rapid metamorphosis, as they will require to  compete with the global players on equal footing. Those Indian Pharmaceutical companies, who are already global players in their own rights, are already well versed with the nuances of this new game and are expected to offer a tough competition to the global players, especially, in the branded generic space, initially.

However, for some domestic players, the new environment could throw a major challenge and make them vulnerable to the consolidation process, already set in motion within Indian pharmaceutical industry.

The newly formed taskforce will hopefully be able to address all these issues in an integrated way to guide this life-line industry to a much higher growth trajectory to compete effectively not only in the global generic space, but also with the global innovator companies, sooner than later.

So the name of the game is to ‘Foster Innovation’ and protect ‘Public Health Interest’ simultaneously and not one at the cost of the other.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Dissapointing: No proposal of ‘Healthcare Reform’ in the Union Budget of India for 2011-12: China rolled it out in 2009.

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January 15, 2011 issue of ‘The Lancet’ in an article titled, “Learning from others” states the following:

“Having universal coverage through a public commitment does have costs, including public costs. The proportion of national expenditure on health that is met by the government is 26% in India and 45% in China. Or, to look at a related contrast, while government expenditure on health care in India is only around 1·1% of its GDP, it is around 1·9% in China. One need not be a genius to see that if the government of a country is ready to spend more on health, it could expect better results in terms of the health of the people.”

While comparing India with China, I reckon, one should take into account of larger disease burden in India as compared to China and the cost that India pays due to slow progress of reform processes in a democratic framework with open and free society and the vibrant outspoken media in the country. Further, the healthcare reform processes in China started over a decade earlier than India, resulting in a significant difference in the healthcare infrastructure, healthcare delivery and the healthcare financing systems of both the countries, over a period of time.

Access to safe drinking water and sanitation:

Access to safe drinking water in India may be comparable to other emerging economies, but sanitation condition in India needs radical improvement. According to World Health Organization (WHO, 2009) the Access to potable water and improved sanitation in those countries are as follows:

Country Drinking Water  (% population) Sanitation                     (% population)
India 89 28
Brazil 91 77
China 88 65
Mexico 95 81
South Africa 93 59

Key issues in the Public Hospitals:

The ethical issues, which the patients face, especially, in the hospitals of India, I reckon, have not been reported for China by the Transparency International.

Transparency International India (2005) had reported the following seven key issues and irregularities experienced by the patients at the Government Hospitals in India:

  1. Medicines unavailable: 52%
  2. Doctors suggest a visit to their private clinic: 37%
  3. Doctors refer to private diagnostic centers: 31%
  4. Over-prescription of medicines: 24%
  5. Bribes demanded by staff: 20%
  6. Diagnostics tests done even when unnecessary: 18%
  7. Doctors are absent: 13%

All these continue to happen in India, with no respite to patients, despite ‘Hippocratic Oath’ being taken by the medical profession and the new MCI guidelines for the doctors being in place within the country. Moreover, a miniscule spend of 1% of the GDP by the Government of India towards public healthcare of the nation, is indeed a shame.

Healthcare Reform in China:

Early April, 2009, China, a country with 1.3 billion people, unfolded a plan for a new healthcare reform process for the next decade to provide safe, effective, convenient and affordable healthcare services to all its citizens. A budgetary allocation of U.S $124 billion has been made for the next three years towards this purpose.
China’s last healthcare reform was in 1997:
China in 1997 took its first reform measures to correct the earlier practice, when the medical services used to be considered just like any other commercial product. Very steep healthcare expenses made the medical services unaffordable and difficult to access to a vast majority of the Chinese population.
Out of pocket expenditure towards healthcare services also increased in China:
The data from the Ministry of Health of China indicates that out of pocket spending on healthcare services more than doubled from 21.2 percent in 1980 to 45.2 percent in 2007. At the same time the government funding towards healthcare services came down from 36.2 percent in 1980 to 20.3 percent in the same period.
Series of healthcare reforms were effectively implemented since then like, new cooperative medical scheme for the farmers and medical insurance for urban employees, to address the situation  prevailing at that time.
The core principle of the new phase of healthcare reform in China:
The core principle of the new phase of the healthcare reform process in China is to provide basic health care as a “public service” to all its citizens, where more government funding and supervision will assume a critical role.
The new healthcare reform process in China will, therefore, ensure basic systems of public health, medical services, medical insurance and medicine supply to the entire population of China. Priority will be given to the development of grass-root level hospitals in smaller cities and rural China and the general population will be encouraged to use these facilities for better access to affordable healthcare services. However, public, non-profit hospitals will continue to be one of the important providers of medical services in the country.
Medical Insurance and access to affordable medicines in China:
Chinese government plans to set up diversified medical insurance systems. The coverage of the basic medical insurance is expected to exceed 90 percent of the population by 2011. At the same time the new healthcare reform measures will ensure better health care delivery systems of affordable essential medicines at all public hospitals.
Careful monitoring of the healthcare system by the Chinese Government:
Chinese government will monitor the effective implementation and supervision of the healthcare operations of not only the medical institutions, but also the planning of health services development, and the basic medical insurance system, with greater care.
It has been reported that though the public hospitals will receive more government funding and be allowed to charge higher fees for quality treatment, however, they will not be allowed to make profits through expensive medicines and treatment, which is a common practice in China at present.
Drug price regulation and supervision in China:
The new healthcare reform measures will include regulation of prices of medicines and medical services, together with strengthening of supervision of health insurance providers, pharmaceutical companies and retailers.
As the saying goes, ‘proof of the pudding is in the eating’, the success of the new healthcare reform measures in China will depend on how effectively these are implemented across the country.

Besides Democracy, China has something to learn from India too:

The article, as mentioned above, from ‘The Lancet’ concludes by saying that unlike China, the real progress in India has come out of public discussion and demonstration within the democratic set-up in India. One such program is distribution of cooked mid-day meals to school children and selected interventions in child development in pre-school institutions. Such programs are currently not available in China for development of proper physical and mental health of, especially, the children of the marginalized section of the society

Conclusion:
There exists a sharp difference between India and China in the critical healthcare delivery system. The Chinese Government at least guarantees a basic level of public funded and managed healthcare services to all its citizens. Unfortunately, the situation is not quite the same in India, because of various reasons.
High economic growth in both the countries has also led to inequitable distribution of wealth, making many poor even poorer and the rich richer, further complicating the basic healthcare issues involving a vast majority of poor population of India.
To effectively address the critical issues related to health of its population, the Chinese Government has already announced a blueprint outlining its new healthcare reform measures for the next ten years. How will the Government of India respond to this situation for the new decade that has just begun?

It was very dissapointing to learn from the Union Budget speech of the Finance Minister of India for 2011-12 that the perspective of our Government on the importance of healthcare for the fellow citizens of India, still remains indifferent.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Quick implementation of the undiluted ‘Central Drug Authority (CDA)’ Bill is essential for emerging India

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Many industry experts after having evaluated the provisions of the original draft proposal for forming a Central Drugs Authority (CDA) in the country, commended and supported this laudable initiative of the Government. This Bill also known as, “The Drugs & Cosmetics (Amendment) Bill No.LVII of 2007 to amend the Drugs & Cosmetics Act, 1940” was introduced in the ‘Rajya Sabha’ on August 21 2007 and was thereafter referred to ‘The Parliamentary Standing Committee of Health and Family Welfare’ for review. The Committee also has submitted its recommendations to the Government since quite some time. However, the fact still remains that the proposed CDA Bill has not seen the light of the day, as yet.
Mashelkar Committee Recommendation:
It is high time to consider the recommendations of Dr. R.A. Mashelkar Committee on the subject and make amendments in Act to facilitate creation of a Central Drugs Authority (CDA) and introduce centralized licensing for manufacturing for sale, export and distribution of drugs.
Seven reasons for the dire need of the CDA in India:
I firmly believe that the formation of the ‘Central Drugs Authority (CDA)’ will provide the following benefits to the Industry and also the Government:
1. Achieving uniform interpretation of the provisions of the Drugs & Cosmetics Act & Rules
2. Standardizing procedures and systems for drug control across the country
3. Enabling coordinated nationwide action against spurious and substandard drugs
4. Upholding uniform quality standards with respect to exports to foreign countries from anywhere in India
5. Implementing uniform enforcement action for banned and irrational drugs
6. Creating a pan-Indian approach to drug control and administration
7. Evolving a single-window system for pharmaceutical manufacturing and research undertaken anywhere in the country.
Major countries have similar set up even within a federal system:
All major countries of the world have a strong federal drug control and administration system in place for the Pharmaceutical Industry. Like for example, despite strongly independent states within the federal structure of the U.S., the US – FDA is a unified and fully empowered federal government entity.
Similarly, coming together of many independent countries in Europe had led to the need for a pan-European drug control agency. This responsibility was vested on to the ‘European Medicine Agency (EMEA)’ with overriding pan-European authority and powers within the European Union (EU).
Thus, a single Central Authority that administers and regulates both pharmaceutical manufacturing and research is an absolute necessity in India’s bid to be a global hub for drug discovery.
The interim measure:
In my view, till CDA is formed, registration and marketing authorization for all new drugs and fixed-dose combinations should only be granted by Drugs Controller General of India (DCGI). I would emphasize, it is essential that a smooth transition takes place from the existing regulatory environment to the proposed CDA, carefully tightening all the loose knots in the process. All necessary infrastructures along with the required personnel must be in place, so that all permissions are granted to applicants within stipulated timeframe.
The watershed regulatory reform initiative should not get diluted:
The CDA Bill is widely considered as a watershed regulatory reform initiative in the pharmaceuticals space of India. This reform process, besides offering all other benefits as discussed above, would also be able  to update the legislation, considering significant advances the country has made since the last five decades, especially in the areas of clinical research, treatment methods, and sophisticated diagnostic and medical devices.
Conclusion:
It now appears, the Government could revive the CDA Bill and reintroduce it in the Parliament, sooner. It was to be introduced in its monsoon session. However, the plan did not fructify, as the Parliament could not function due to a logjam created by our politicians.
It is worth noting that the proposed centralize drug licensing mechanism was vehemently opposed by the state drug authorities and some section of the industry. The stated position of the opponents to the CDA Bill apprehends that the centralized structure will not be able to deliver, as the requisite infrastructure and manpower for the same are not in place, as yet.
This development bring out to the fore the lurking fear that the proposal to centralize drug licensing as a part of the proposed law, very unfortunately, may eventually get quite diluted because of vested interests.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The top two reasons for not seeking medical treatment, across the population, are not poor ‘Access to Healthcare’ in India

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“About 1.8 million children under age of 5 die in India every year; 68,000 mothers die due to maternal causes, and 52 million children in the country are stunted”.

“With 70% people living in more than 600,000 villages across rural India, not more than an estimated 30% have access to modern medicine”.

Such sensational headlines could be fallacious at times and may tend to divert the attention of all concerned from some of the key healthcare issues in India. We are indeed too negative in our approach towards a problem solution process. All stakeholders interested in improved healthcare facilities are continuously engaged in an eternal blame game. Government blames the industry and the industry blames the government and so on. In this unfortunate logjam scenario since last several decades, any possibility of breaking it will require active interference by a ‘Cerebral Braveheart”

Moreover, taking advantage of this situation, some groups of people want to progress their vested interests by projecting a ‘Weaker India’ and pontifying with crocodile tears.

Let me now try to explore these issues with hard facts.

Access to ‘round the year’ healthcare facilities in India:

As reported by the Government of India in 2004, access to healthcare infrastructure and services for the rural villages in terms of percentages were as follows (Source:India Health Report 2010) :

  1. Primary Health Centers: 68.3
  2. Sub-Centers: 43.2
  3. Government Dispensaries: 67.9
  4. Government hospitals in urban areas: 79
  5. Private Clinics: 62.7
  6. Private Hospitals: 76.7

I reckon, after implementation of National Rural Health Mission (NRHM) and National Urban Health Mission (NRUM), this situation prevailing in 2004 has improved. However, the scope for further improvement in all these areas still remains very high.

Hence, the shrill voice highlighting around 65% of population of India does not have access to healthcare or medicines seem to be motivated and highly misplaced.

‘Access to Modern Medicines’ is improving in India:

In addition to the above facts, CAGR (volume) of the pharmaceutical industry since the last ten years has been over 10%, leaving aside another robust growth factor being contributed through the introduction of new products, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas certainly signals towards significant increase in the domestic consumption of medicines in India.

IPM maintained a scorching pace of 16.5% growth in 2010. A recent forecast of IMS highlights similar growth trend in 2011, as well.

In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets clearly supports the argument of increasing ‘Access to Modern Medicines’ in India. The improvement in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% growth per year, for the last nine years over the base year, to improved access to medicines, it will indicate, at least, 57% of the population of India is currently having access to modern medicines and NOT just 35%, as I wrote in this blog earlier.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefer to live on to our past.

Be that as it may, around 43% of the population will still not have ‘Access to Modern Medicines’ in India. This issue needs immediate attention of the policy makers and can be resolved with a holistic approach. A robust model of healthcare financing for all socio-economic strata of the population, further improvement of healthcare infrastructure and healthcare delivery systems are the needs of the hour.

So called ‘Diseases of the Poor’ are no longer the ‘Leading Causes of Death’ in India:

Unlike popular belief that diseases of the poor are the leading causes of death in India. The office of the Registrar General of India (2009) highlights a totally different scenario, where the top five leading causes of death in terms of percentage, have been reported as follows:

  1. Cardiovascular diseases: 24.8
  2. Chronic Obstructive Pulmonary Disease (COPD): 10.2
  3. Tuberculosis: 10.1
  4. Cancer: 9.4
  5. Ill-defined conditions: 5.3

Thus the diseases of the developed world like cardiovascular diseases, COPD and Cancer cause over 45% of the total deaths in India, whereas Tuberculosis, Malaria, Diarrheal and digestive diseases cause around 23% deaths in the country.

The key reasons for not seeking medical treatment are not poor ‘Access to Healthcare’:

As I wrote before, the key reasons for not seeking medical treatment across socio-economic status in the country are not predominantly ‘Poor Access to Healthcare ‘. The following data will vindicate this point:

Reason Rural Poorest 20% Rural Richest 20% Urban Poorest 20% Urban Richest 20%
Financial Reasons 39.7 21.2 37.2 2.3
Ailments not considered serious 27.2 45.6 44.3 84.4
No Medical facilities 12.8 10.0 1.6 _
Others 20.3 23.2 16.9 13.3
Total 100 100 100 100

(Source: India Health Report 2010)

Conclusion:

Thus even if the government ensures ‘Access to Healthcare’ to 100% of the population of India by taking all drastic infrastructural, policy and delivery measures, still a large section of the population both rich and poor and from urban as well as rural India will not seek medical treatment assuming many of their ailments are not serious enough. Such a situation will definitely not materially improve the healthcare scenario of India, adversely affecting the economic progress of the country by a robust productive population.

This necessitates continuous disease awareness campaigns with active participation of all stakeholders, including the civil society across the country, sooner rather than later, in tandem with all measures as will deem necessary.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Are Indian patients victims of “unnecessary tests and procedures, rewards for referrals and irrational use of drugs?” A perspective

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Since quite some time, serious concerns have been expressed by the media, government and the civil society at large about the means adopted by the pharmaceutical industry in general to get their respective brands prescribed by the doctors and why do some of the doctors prescribe what they prescribe to the patients out of multiple available choices.
The MCI Guidelines:
Being concerned mainly by the media outcry, the Medical Council of India (MCI), a year ago, amended their related guidelines for the doctor, clearly articulating what they can and cannot do during their interaction and transaction with the pharmaceutical and related industries.
The Ministry of Health believes that these guidelines, if strictly enforced, would severely limit what the doctors can receive from the pharmaceutical companies in terms of free gifts of wide ranging financial values, entertainments, free visits to exotic locations under various commercial reasons, lavish lunch and dinner etc. in exchange of prescribing specific brands of the concerned companies more…more…and more.
“The Lancet” report:
Let me now combine this scenario with a recent report on India dated January 11, 2011, published in ‘The Lancet’, which states in a similar, though not the same context, as follows:
1. “Reported problems (which patients face while getting treated at a private doctor’s clinic) include unnecessary tests and procedures, rewards for referrals, lack of quality standards and irrational use of injection and drugs. Since no national regulations exist for provider standards and treatment protocols for healthcare, over diagnosis, over treatment and maltreatment are common.”
2. “Most people accessed private providers for outpatient care – 78% in rural areas and 81% in urban areas.”
3. “India’s private expenditure of nearly 80% of total expenditure on health was much higher than that in China, Sri Lanka and Thailand.”
Considering the above three critical issues of India, as reported by ‘The Lancet’, the need to follow a transparent code of pharmaceutical marketing practices by the entire pharmaceutical industry is of utmost importance. Recently amended MCI guidelines for the doctors are welcome steps in the right direction.
Are patients just the pawns?
In the absence of all these, the patients of all socio-economic strata will continue to be exploited as pawns by some unscrupulous healthcare players to satisfy their raw greed for making fast bucks at the cost of the intense agony of the ailing patients and their near and dear ones.
As stated earlier, this phenomenon is not new at all. Over a period of time, many stakeholders of the pharmaceutical industry and the public at large have been raising the issue of physicians being influenced in their prescription decisions by various types of payments made to them by the pharmaceutical companies. Such types of significant and seemingly avoidable expenditures, presumed to be considered by the respective companies as a part of their ‘marketing costs’, are believed to be included in the maximum retail price (MRP) of medicines, making them more expensive to the patients.
On the other hand, most physicians believe that free entertainment, gifts, their travel costs and seminar sponsorships in no way influence their prescription decision for the patients.
This is not a just India specific issue. Some skeptics believe that it has now become an all pervasive global scandal.
Self-regulation by the industry is most desirable:
To address this issue effectively, some national and international pharmaceutical associations have come out with their own codes of ethical marketing practices along with appropriate stakeholder grievance redressal mechanism, effectively.
Despite all these, it is an undeniable fact that overall perceptual image of the pharmaceutical industry in this respect to the stakeholders, in general, is not as good as it should have been.
The Government intervened in India:
Being alarmed by various media reports on the alleged pharmaceutical marketing (mal) practices in the country, the Department of Pharmaceutical (DoP) had advised the pharmaceutical industry to develop an ‘Uniform Code of Marketing Practices (UCMP)’, which will be applicable to the entire pharmaceutical industry in India.
It has been reported that the said UCMP with its stakeholder grievance redressal mechanism in a transparent procedural format, was submitted to the government by the major pharmaceutical industry associations in India. However, because of dissent of some section of the industry, the UCMP has not received the ‘green signal’ of the government, as yet. It was expected that all stakeholders will help maintaining the sanctity of the UCMP to address this sensitive global and local issue, effectively.
An emerging trend of public disclosure:
Around third quarter of 2008, in an industry first step, Eli Lilly announced its intent of full disclosure of payments that the company made to the physicians for various commercial reasons. Eli Lilly indicated disclosure of payments of more than US $500 to the physicians for advice and speaking at the seminars. Over a period of time, the company indicated that it will expand such disclosure to include other forms of payments to the physicians like gifts, various entertainment and travel.
Eli Lilly was soon followed in this direction by global pharmaceutical majors like, Merck and GlaxoSmithKline (GSK).
However, in India, such instances have not been reported, as yet.
Skepticism with voluntary disclosure:
Some are still skeptical about announcements of such ‘voluntary disclosure of payment to the physicians’ by the global pharmaceutical majors to bring in better transparency in the functioning of the industry.

This section of people believes, there are hundreds and thousands of other pharmaceutical companies, who will not follow such precedence of voluntary disclosure in the absence of any properly enforced regulation.
Conclusion:
In all the countries and India is no exception, pharmaceutical companies, by and large, try to follow the legal ways and means to maximize turnover of their respective brands. Many follow transparent and admirable stringent self-regulations, stipulated either by themselves or by their industry associations.
‘Self-regulation with pharmaceutical marketing practices’ and ‘voluntary disclosure of payment to the physicians’ by some leading global pharmaceutical companies are laudable steps to address this vexing issue. However, the moot question still remains, are all these good enough for the entire industry?
It is about time that all players in the healthcare space realize, in case these voluntary measures of the industry and the guidelines of the regulators like MCI, do not work effectively for any reason, there will be no other option but for the government to step in with iron hand and ‘fool proof’ regulations.
The popular dictum, especially, used in the healthcare industry, “all these are for the patients’ interest” should not be allowed to be misused or abused, any further, by some unscrupulous elements and greedy profiteers, to squeeze out even the last drop of financial resource from the long exploited population of ailing patients of India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Social Media – an evolving new-age powerful communication tool for the Pharmaceutical Industry, both global and local

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David Edelman in his article titled, “Branding in the Digital Age:You’re Spending your Money in All the Wrong Places”, published in the ‘Harvard Business Review’  dated December 2010, commented the following:

“Consumers today connect with brands in fundamentally new ways, often through media channels that are beyond manufacturers’ and retailers control. That means traditional marketing strategies must be redesigned to accord with how brand relationships have changed.”

I reckon, broadly, this is applicable to the Pharmaceutical Industry, as well, in the current scenario.

Today, we all are witnessing that the opportunities to share information within the communities and groups with effective use of social media like ‘Twitter’, ‘YouTube’, ‘Facebook’, ‘Linked-in’, blogs etc. are increasing by manifold, every passing day, with amazing speed. A very significant number of internet users across the world, are now quite actively taking part through social media in various areas of their interest.

The social networking site ‘Facebook’ claimed a few months back that it has connected over 400 million users all over the world and over 9.6 million users just in India with 20 million Indians using Internet every day. It is also interesting to note that each day about 68.5% of online population in the country visits social networking sites.

With 80% of the internet users currently searching for medical, health and product related information through cyber media, the importance of these powerful channels to engage interested stakeholders and groups in a meaningful dialogue on relevant products, services and issues, has increased by manifold. The pharmaceutical industry can no longer afford to ignore or even remain indifferent to this emerging trend.

Many global pharmaceutical majors having realized the future potential of cyber connectivity, have already started experimenting with social media, which are indeed outstanding byproducts of a disruptive innovation of the millennium, called ‘Internet’. In not too distant future, the pharmaceutical players are also expected to make the best use of social media not only to promote their products and services, but also to fulfill their obligation towards corporate social responsibilities.

The new-age marketing tool:

With more and more doctors not giving adequate time and even showing reluctance to meet the medical representatives and the important hospitals following suit, the global pharmaceutical companies are now in search of new and even more effective marketing tools.

To get the marketing communications across, to important target audiences, many of them have started experimenting, quite seriously, with the digital world. Effective networking media like ‘Facebook’ , ‘YouTube’, ‘MySpace’ and ‘Twitter’ are showing promises to become powerful online pharmaceutical marketing tools.

Global pharmaceutical companies have already started ‘testing the water’:

Examples of global pharmaceutical giants who have already started using this new age media for pharmaceutical marketing, in varying scale, are as follows:

1. Bayer uses ‘Facebook’ page to promote its Aspirin for women. For young people of the UK, suffering from diabetes, the company has also come out with an online blood glucose monitoring system.

2. Merck is using ‘Facebook’ to promote its cervical cancer vaccine, Gardasil

3. GlaxoSmithKline is using ‘YouTube’ for ‘restless-legs syndrome’ awareness film. The popularity of this video spot perhaps has prompted the company to come out with its own ‘YouTube’ channel last year with a name, ‘GSKvision’.

4. AstraZeneca is also using ‘YouTube’ for a program called ‘My Asthma Story’ related to their anti-asthma drug Symbicort.

5. Johnson & Johnson’s ‘You Tube’ channel has now over 90 videos

6. Novartis is using the social media dedicated to Chronic Myeloid Leukemia (CML) to connect to healthcare professionals, patients groups and even individual patients.

7. Recent report of Pfizer’s new RSS feed and the plan for a unique ‘Pfacebook’ site for internal communication perhaps is an important step towards this direction. The company has also been reported to have teamed up with Private Access to create a social networking website to bring clinical researchers and the patients together.

8. Boehringer Ingelheim has also started using the ‘Twitter’ since 2008

The reasons for using the social media as a marketing tool:

Social media like, ‘Facebook’, ‘Twitter’, ‘YouTube’ etc. provide a very important platform towards patients’ outreach efforts of the pharmaceutical companies exactly in a format, which will be preferred by the target group.

With the help of new-age social media these companies are now joining communities to begin a dialogue with them. It has been reported that some of these companies have already created un-branded sites like, silenceyourrooster.com or iwalkbecause.org, to foster relationship with patients’ group through online activity, the contents of which have been generated by the users themselves of the respective social medium. With the help of click-through links these sites lead to the branded sites of the concerned companies.

As reported by TNS Media Intelligence, internet media spending of the global pharmaceutical companies increased by 36% to US$137 million, in 2008, which is significantly higher than their spending in Television advertisements.

Why is the entry in the new-age social media so slow?

Pharmaceutical companies are currently delving into marketing through cyber media with a very cautious approach, though the new social media will become more central to many global marketing strategies in not too distant future. The cautious approach by the pharmaceutical companies is primarily due to evolving regulatory requirements in this new space

In the USA, very recently the FDA cautioned the major players in the industry to refrain them from publishing any misleading communication through social media. This is primarily because of absence of any published guidelines for online pharmaceutical marketing. How to use this powerful social media for maximum marketing and other benefits will indeed be quite a challenging task, at this stage. Many pharmaceutical companies are, therefore, slow to use the social media to the fullest extent.

Not only in India, even in the developed countries like, the USA, there are no specific regulatory guidelines to promote pharmaceutical brands or create brand awareness through these media. This scenario holds good for most of the countries of the world, including Europe, Japan. Thus, in this much uncharted territory, as there are not enough foot-steps follow, the pharmaceutical companies are currently just ‘testing the water’. Most probably to fathom how far regulatory authorities will allow them to explore with this new media.

Effective use of social media is expected to be financially attractive:

Low costs associated with creating internet promotional inputs will make social media quite attractive to pharmaceutical and bio-pharma companies, not only as an effective marketing tool, but also in their other outreach program for the stakeholders. Various types of social media are expected to be significantly cost-effective in creating and executing successful pharmaceutical brand awareness and brand marketing campaigns, aiming at well-defined and the specific target groups.

Use of social media in India:

In India though the social media are currently growing at around 35% annually, their overall utilization as an important marketing tool has remained rather limited, thus far, with practically no significant usage by the Indian pharmaceutical industry. I reckon, it is about time that the important pharmaceutical players in the country start creating their own network of loyalists and engage them with this important communication tool to meaningful dialogues, involving their respective brands and/or services and related issues.

‘Proof of the pudding is in the eating’:

A recent report indicates that in 2007, well reputed computer maker Dell’s ‘Twitter’ activity brought in US$ half-million in new business to the company.

Thus the innovative use of the new-age social cyber-media promises immense potential to open a goldmine of opportunities for the global pharmaceutical industry.

Conclusion:

I reckon, the use of social media as an effective business communication tool, will start growing at a scorching pace in India, shortly.

Some large and even Small and Medium Enterprises (SMEs) have just initiated appropriate processes towards ‘Social Media Optimization’ involving their respective brands and related services. This is primarily aimed at improving awareness and increasing market share through significantly higher share of voice and more intense customer engagement.

With rapid increase in the numbers of such initiatives, there will probably be a sea change in the way stakeholder engagement plans are worked out by the industry in general and the pharmaceutical industry in particular, ushering a new dawn in the communication space of the business.

At the same time, we should realize that in this new ball game customers will really be the king and the quality of innovative usage of all powerful social media could well draw the decisive line between business communication success and failure.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Pfizer and Biocon deal – heralds dawn of a new era for the Biopharmaceuticals Industry of India

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On October 19, 2010, home grown Biotech Company Biocon, based in the IT heartland – Bangalore created a stir in Industry by inking an interesting international corporate business deal with the largest global pharmaceutical company – Pfizer. The deal will bring to Biocon a total sum of US $350 million and enable Pfizer to globally commercialize Biocon’s biosimilar (generic versions of biotechnology medicines) human recombinant insulin and three insulin analogues.

Before this deal, Sanofi-Pasteur, the vaccine business unit of the global major Sanofi-aventis had acquired Shantha Biotech, located at Hyderabad for a sum of Rs 3,750 Crore, in July 2009.

Just a year before the above acquisition in india, on December 11, 2008, Reuters reported, just two days after Merck announced a major push into biosimilar medicines; Eli Lilly signaled similar aspirations. This report, at that time, raised many eyebrows in the global pharmaceutical industry, as it was in the midst of a raging scientific debate on the appropriate regulatory pathways for biosimilar drugs. Be that as it may, many felt that this announcement ushered in the beginning of a new era. An era of intense future competition with biosimilar drugs in the global market, with immense commercial interest. On October 19, 2010 the biosimilar deal between Biocon and Pfizer vindicated this point.

Increasing global interest on biosimilar drugs:

Globally, the scenario for biosimilars started heating up when Merck announced that the company expects to have at least 5 biosimilars in the late stage development by 2012. The announcement of both Merck and Eli Lilly surprised many, as the largest pharmaceutical market of the world – the U.S.A, at that time, was yet to approve the regulatory pathway for biosimilar medicines. However, along with the recent healthcare reform by the Obama administration, the regulatory pathway for biosimilar drugs has now been clearly charted by the US FDA. In the developed world, European Union (EU) had taken a lead towards this direction by putting a robust system in place, way back in 2003.

What then prompts the research based global pharmaceutical companies like Pfizer, Sanofi-aventis, Merck and Eli Lilly to step into the arena of Biosimilar medicines? Is it gradual drying up research pipeline together with skyrocketing cost of global R&D initiatives?

The future global business potential of Biosimilar medicines:

Currently, over 150 different biologic medicines are available in the global pharmaceutical market. However, the low cost biosimilar drugs are available in just around 11 countries of the world, India being one of them. Supporters of biosimilar medicines are indeed swelling as time passes by. At present, the key global players are Sandoz (Novartis), Teva, BioPartners, BioGenerix (Ratiopharm) and Bioceuticals (Stada). With the entry of pharmaceutical majors like, Pfizer, Sanofi-aventis, Merck and Eli Lilly, the global biosimilar market is expected to develop at a much faster pace than ever before. Removal of regulatory hurdles for the marketing approval of such drugs in the US – the largest pharmaceutical market of the world, will be the key growth driver.

Recently, the EU has approved Sandoz’s (Novartis) Filgrastim (Neupogen brand of Amgen), which is prescribed for the treatment of Neutropenia. With Filgrastim, Sandoz will now have 3 Biosimilar products in its portfolio.

Global Market Potential of Biosimilar Drugs:

The biosimilar drug market in the world is estimated to be around U.S. $ 16 billion by 2011. Currently, off-patent biologic blockbusters including Erythropoietin offer an excellent commercial opportunity in this category. By 2013, about 10 branded biologics with a total turnover of around U.S. $ 15 billion will go off-patent, throwing open greater opportunity for the growth of biosimilar drugs internationally.

Biosimilar Drugs in India:

Sales of biosimilar drugs in India are estimated to be around U.S. $ 4 billion by 2011 with scorching pace of growth driven by both local and global demands.

Recombinant vaccines, erythropoietin, recombinant insulin, monoclonal antibody, interferon alpha, granulocyte cell stimulating factor like products are now manufactured by a number of domestic biotech companies like Biocon, Panacea Biotech, Wockhardt, Emcure, Shantha Biotech, Bharat Biotech, Serum Institute of India, Dr. Reddy’s, Ranbaxy, etc. The ultimate objective of all these Indian companies will be to get regulatory approval of these products in the US and the EU either on their own or through collaborative initiatives.

It is worth mentioning here that to give a fillip to the Biotech Industry in India; the National Biotechnology Board was set up by the Government of India under the Ministry of Science and Technology way back in 1982. The Department of Biotechnology (DBT) came into existence in 1986. The DBT now spends around US$ 200 million annually to develop biotech resources in the country and have been making reasonably good progress. The DBT is reported to have undertaken an initiative for quite some time to prepare regulatory guidelines for Biosimilar Drugs, which is expected to conform to international quality and patients’ safety standards.

Steps taken by the Indian pharmaceutical companies:

Biosimilar version of Rituxan (Rituximab) of Roche used in the treatment of Non-Hodgkin’s lymphoma has already been developed by DRL in India. Last year Rituxan clocked a turnover of over US$ 2 billion. DRL also has developed filgastrim of Amgen, which enhances production of white blood-cell by the body, and markets the product as Grafeel in India. Similarly Ranbaxy has collaborated with Zenotech Laboratories to manufacture G-CSF.

On the other hand Glenmark is planning to come out with its first biotech product by 2011 from its biological research establishment located in Switzerland.

The focus is on Oncology:

Many domestic Indian pharmaceutical companies are targeting Oncology disease area for developing biosimilar drugs, which is estimated to be the largest segment with a value turnover of over US$ 55 billion by the end of 2010 growing over 17%. As per recent reports about 8 million deaths take place all over the world per year due to cancer. May be for this reason the research pipeline of NMEs is dominated by oncology with global pharmaceutical majors’ sharp R&D focus and research spend on this particular therapy area. About 50 NMEs for the treatment of cancer are expected to be launched globally by 2015.

Current size of the Indian oncology market is around US$ 18.6 million, which is expected to be over US$ 50 million by the end of 2010; the main reason being all these are and will be quite expensive products.

A trigger point for more collaborative initiatives:

It is expected that the recent Pfizer – Biocon deal will trigger many other collaborative initiatives between the global and the local pharmaceutical companies.

Among India biotech companies, Reliance Life Sciences has already marketed Recombinant Erythropoietin, Recombinant Granulocyte Colony Stimulating Factor, Recombinant Interferon Alpha and Recombinant tissue plasminogen activator. This company has been reported to have the richest pipeline of biosimilar drugs in India. Companies like Wockhardt, Lupin, DRL and Intas Biopharmaceuticals are also in the process of developing an interesting portfolio of biosimilar drugs in India to fully encash the fast growing global opportunities.

Biosimilar global business model will fast gain ground:

Many large research-based global pharmaceutical companies, after having encountered the ‘patent cliff’, are now looking at the generic and biosimilar businesses, in a mega scale, in the emerging markets of the world, like India. Our country has witnessed major acquisitions like, Ranabaxy, Shantha Biotech and Piramal Healthcare by Daiichi Sankyo of Japan, Sanofi-aventis of France and Abbott of USA, respectively. We have also seen collaborative initiatives of large global companies like, GSK, AstraZeneca, and Pfizer with Indian companies like DRL, Aurobindo, Claris, Torrent, Zydus Cadilla, Strides Arcolab and now Biocon to reach out to the fast growing global generic and biosimilar drugs markets.

This trend further gained momentum when immediately after Biocon deal early this week, on October 21, 2010, Pfizer strengthened its footprints in the global generics market with yet another acquisition of 40% stake in Laboratorio Teuto Brasilieiro of Brazil with US $240 million to develop and globally commercialize their generic portfolio.

Conclusion:

All said and done, the recent international deal of Pfizer and Biocon to globally commercialize four biosimilar insulin and analogues, developed by the later in India, does signal a new global status for the Indian biosimilar drugs to the pharma MNCs, who were vocal critics of such drugs developed in India, until recently.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Indian Pharmaceutical Industry could well be a contender for global supremacy by the next decade, competing effectively with China

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By the next decade of this millennium both India and China are expected to be the top two emerging markets of the world in the pharmaceutical sector, registering a scorching pace of growth all around. The quality of consistency and sustainability of growth, will determine who will be the main contender of supremacy and the ultimate winner in this game of wealth creation for the respective countries and be the ‘Eldorado’ of the global pharmaceutical companies.

The financial reform measures in the run up to the process of globalization started earlier in China, in 1980 as against 1990 in India. In that sense China took a plunge to be an active member of the ‘global village of commerce’ at least a decade earlier than India.

Reform process started earlier in China:

The Product Patent regime in India was reintroduced in January 1, 2005. Well before that China started creating and encouraging a large number of independently funded pharmaceutical R&D institutions to create an environment of innovation within the country. Many of these institutions are now viable profit centres, creating wealth for the country.

At the same time, focusing on global ‘economies of scale’, Chinese pharmaceutical players have now become globally competitive, may be a shade better than India. Clear dominance of China in the business of ‘Active Pharmaceutical Ingredient (API)’ among many other, will vindicate this point. On the other hand in the formulations business, India is miles ahead of China, catering to over 20% of the global requirements for the generic pharmaceuticals. Moreover, in ANDA and DMF filings, as well, India is currently much ahead of China.

FDI in India and China:

The Pharmaceutical Industry in India has now started attracting increasing Foreign Direct Investments (FDI). As per the reply to question No. 615 tabled in the Parliament of India (Rajya Sabha) on November 25, 2009 by Mr. Jyotiraditya Scindia, Minister of State, Ministry of Commerce and Industry, from the year 2006-07 up to September 2009, India attracted FDI of US $ 817.30 million for Drugs and Pharmaceuticals with a compounded growth rate of around 60%. USA, Canada, Singapore, UAE and Mauritius contributed 82% to this FDI, which in turn helped significantly to fuel further development and growth of the Industry.

According to ‘The Survey of Foreign Investments in China’s Medicine Industry’ of the Government of China, the FDI in the pharmaceutical industry of the country for the three year period commencing from 2006 to 2008 was around US $ 1772 million, over one third of which coming from Hong Kong and around 11% from the USA.

It is worth noting that the financial and policy reform measures were initiated in China much earlier, as compared to India, which in turn have enabled China to attract more FDIs in the pharmaceutical sector, thus far. In the new paradigm of the post product patent regime both the countries are expected to grow at a scorching pace attracting more and more FDIs for their respective countries.

In this article, I would like to focus on some of these comparisons to assess the progress made so far by both the countries, in a comparative yardstick and the key factors, which will decide the pace-setter.

Country ranking both in value and growth terms:

In global ranking, China is currently the seventh (India: 14) largest pharmaceutical market and is expected to be the fifth (India: 10) largest market by 2015 and the third largest by 2020. Chinese pharmaceutical market is expected to grow by over 15% per annum in the next five years, which is higher than India.

Healthcare coverage of population:

China is racing ahead and gradually but surely distancing itself from India, widening the performance gap with rapid increase of domestic consumption of modern medicines. It is worth mentioning that as per WHO, the access to modern medicines in China is around 85% as against just 35% in India. Of a population of 1.3 billion, 250 million of Chinese are covered by health insurance, another 250 million partially covered by insurance and balance 800 million are not covered by any insurance. In India total number of people who are having some sort of healthcare financing coverage will be around 200 million and penetration of health insurance will be just around 3.5% of the population.

Currently India is losing grounds to China mainly in healthcare infrastructure development, with inadequate healthcare delivery systems and delay in rolling out a long overdue comprehensive healthcare reform process in the country.

Strong commitment of the Chinese Government to the globalization process:

Strong commitment of the Chinese Government to make China a regional hub of R&D and contract research and manufacturing (CRAM) activities within next seven to ten years is paying rich dividends.
Department of Pharmaceuticals recently expressed its intention to make India a R&D hub in not too distant future. This cannot be achieved just through investments of couple of million US $ through Public Private Partnership (PPP). A strong commitment of the Government to hasten regulatory reform processes will be the key factor. The new product patent regime for the pharmaceutical industry has ushered in a new paradigm, with the Government planning to strike a right balance between TRIPs compliant IPR regime and the ‘Public Interest’ and NOT one at the cost of the other.

India and China competing well in Pharma outsourcing business:

Since last 5 years both India and China have made rapid strides in the space of pharma outsourcing. Today the evolving business model of ‘Contract Research and Manufacturing Services (CRAMS)’, is shaping up quite well. To make India a global hub for Pharmaceutical outsourcing of all types, the pharmaceutical industry of the country has all the ingredients. India has the potential to emerge as a serious contender for global supremacy, in this fast growing sector, especially in ‘contract manufacturing’ area, having largest number of US-FDA approved manufacturing plants, outside the USA.

According to ‘Global Services”, in 2009 Pharmaceutical outsourcing market in China and India was of US $ 1.77 billion and US $ 1.42 billion, respectively with China growing at a faster pace. The future growth potential for both the countries is huge, as each enjoyed just 2% share of this outsourcing market in 2009.

It has been forecasted that China will have more environmental growth accelerators than India due to greater continuing fiscal stimulus and policy support by their Government, which could catapult the country ahead of India, just beyond 2010.

‘Country Attractiveness Index’ for clinical trials:

‘A.T. Kearney’ developed a ‘Country Attractiveness Index (CAI)’ for clinical trials, for the use of, especially, the pharmaceutical industry executives to make more informed decision on offshore clinical trials. As per this study, the CAI of China is 6.10 against 5.58 of India.

Pharmaceutical patent filing:

In patent filing too China seem to be ahead of India. Based on WIPO PCT applications, it has been reported that 5.5% of all global pharmaceutical patent applications named one inventor or more located in India as against 8.4% located in China. This will give an Indication how China is making rapid strides in R&D areas, as well.

Where India is regarded clearly as a preferred destination:

However, India is globally considered as a more mature arena for chemistry and drug-discovery activities than China. Most probably because of this reason, companies like, DRL, Aurigene, Advinus, Glenmark, Nicholas Piramal and Jubilant Organosys could enter into long-term deals with Multinational Companies (MNCs) to discover and develop New Chemical Entities (NCEs).

Pharmaceutical exports, by end 2010:

India is currently an attractive pharmaceutical outsourcing destination across the globe. Pharmaceutical exports of India is currently far ahead of China. However, PriceWaterhouseCoopers (PWC) reports that China may reverse this trend by the end of 2010, establishing itself as the largest country for Pharmaceutical exports. In API exports China has already overtaken India, way back in 2007. The report titled, “The Changing dynamics of pharmaceutical outsourcing in Asia” indicates that in 2007 against API exports of U.S$ 1.7 billion of India, China clocked a figure of US$ 5.6 billion. By the end of 2010, China is expected to widen the gap further with API export of U.S$ 9.9 billion against India’s U.S$ 2.8 billion.

Korn/Ferry International reports that more and more Indian talent is being pulled to China to fill key roles, especially in the API sector, signaling ‘brain drain’ from India to China.

Conclusion:

As I said earlier and as has been reported by Korn/Ferry, China’s current overall infrastructure in the pharmaceutical space is better than India primarily due to firm commitment of the Chinese government to initiate reform measures to fetch maximum benefits of globalization process in the country. Government of India seems to be lacking in its commitment to play its role both as a provider and also as an effective enabler in this important space of ‘knowledge economy’ of the world.

India has all the potential to surge ahead with more rapid strides in this ball game. To achieve this cherished goal, the government, other stakeholders and the domestic pharmaceutical Industry should play the ball well, effectively, and in tandem.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.