Why there are no any Indian Government Pharmaceutical Manufacturing Industries?
OVERVIEW
OVERVIEW
The number of purely Indian pharma companies is fairly low. Indian pharma industry is mainly operated as well as controlled by dominant foreign companies having subsidiaries in India due to availability of cheap labor in India at low cost. In 2002, over 20,000 registered drug manufacturers in India sold $9 billion worth of formulations and bulk drugs. 85% of these formulations were sold in India while over 60% of the bulk drugs were exported, mostly to the United States and Russia. Most of the players in the market are small-to-medium enterprises; 250 of the largest companies control 70% of the Indian market.Thanks to the 1970 Patent Act, multinationals represent only 35% of the market, down from 70% thirty years ago.
Most pharma companies operating in India, even the multinationals, employ Indians almost exclusively from the lowest ranks to high level management. Homegrown pharmaceuticals, like many other businesses in India, are often a mix of public and private enterprise.
In terms of the global market, India currently holds a modest 1–2% share, but it has been growing at approximately 10% per year. India gained its foothold on the global scene with its innovatively engineered generic drugs and active pharmaceutical ingredients (API), and it is now seeking to become a major player in outsourced clinical research as well as contract manufacturing and research. There are 74 US FDA-approved manufacturing facilities in India, more than in any other country outside the U.S, and in 2005, almost 20% of all Abbreviated New Drug Applications (ANDA) to the FDA are expected to be filed by Indian companies. Growth in other fields notwithstanding, generics are still a large part of the picture. London research company Global Insight estimates that India’s share of the global generics market will have risen from 4% to 33% by 2007.The Indian pharmaceutical industry has become the third largest producer in the world and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion.
Quality[edit]
The Quality of drugs and APIs (Active Pharmaceutical Ingredients) made by Indian pharmaceutical companies is often poor. In the past three years 2015 - 2017, there were 31 FDA warning letters to Indian pharmaceutical companies citing serious Data Integrity issues, including data deletion, manipulation or fabrication of test results, see “An Analysis Of 2017 FDA Warning Letters On Data Integrity” By Barbara Unger, Unger Consulting Inc. https://www.pharmaceuticalonline.com/doc/an-analysis-of-fda-warning letters-on-data-integrity-0003
See the very long list of Indian pharmaceutical companies which have been placed on Import Alert by the FDA due to serious noncompliance with Good Manufacturing Procedures http://www.accessdata.fda.gov/cms_ia/importalert_189.html
See the European Medicines Agency EudraGMDP Noncompliance Reports based on Inspections of companies that revealed serious noncompliance with Good Manufacturing Procedures: http://eudragmdp.ema.europa.eu/inspections/gmpc/searchGMPNonCompliance.do
See FDA Warning Letters detailing serious noncompliance with Good Manufacturing Procedures: http://www.fda.gov/iceci/enforcementactions/WarningLetters/default.htm
Exports[edit]
Exports of pharmaceuticals products from India increased from US$6.23 billion in 2006-07 to US$8.7 billion in 2008-09 a combined annual growth rate of 21.25%.[2] Some of the major pharmaceutical firms include Sun Pharmaceutical, Cadila Healthcare and Piramal Enterprises.[2]
India exported $11.7 billion worth of pharmaceuticals in 2014. The 10 countries below imported 56.5% of that total:[12]
| Rank | Country | Value (US$) | Share |
|---|---|---|---|
| 1 | United States | $3.8 billion | 32.9% |
| 2 | South Africa | $461.1 million | 3.9% |
| 3 | Russia | $447.9 million | 3.8% |
| 4 | United Kingdom | $444.9 million | 3.8% |
| 5 | Nigeria | $385.4 million | 3.3% |
| 6 | Kenya | $233.9 million | 2% |
| 7 | Tanzania | $225.2 million | 1.9% |
| 8 | Brazil | $212.7 million | 1.8% |
| 9 | Australia | $182.1 million | 1.6% |
| 10 | Germany | $178.8 million | 1.5% |
Patents[edit]
A significant change in intellectual property protection in India was the 1 January 2005 enactment of an amendment to India’s patent law that reinstated product patents for the first time since 1972. The legislation took effect on the deadline set by the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which mandated patent protection on both products and processes for a period of 20 years. Under this new law, India will be forced to recognise not only new patents but also any patents filed after 1 January 1995.[13] Indian companies achieved their status in the domestic market by breaking these product patents, and it is estimated that within the next few years, they will lose $650 million of the local generics market to patent-holders.[needs update]
In the domestic market, this new patent legislation has resulted in fairly clear segmentation. The multinationals narrowed their focus onto high-end patents who make up only 12% of the market, taking advantage of their newly bestowed patent protection. Meanwhile, Indian firms have chosen to take their existing product portfolios and target semi-urban and rural populations.[citation needed]
Product development[edit]
Small and medium enterprises[edit]Indian companies are also starting to adapt their product development processes to the new environment. For years, firms have made their ways into the global market by researching generic competitors to patented drugs and following up with litigation to challenge the patent. This approach remains untouched by the new patent regime and looks to increase in the future. However, those that can afford it have set their sights on an even higher goal: new molecule discovery. Although the initial investment is huge, companies are lured by the promise of hefty profit margins and thus a legitimate competitor in the global industry. Local firms have slowly been investing more money into their R&D programs or have formed alliances to tap into these opportunities.[14]
As promising as the future is for a whole, the outlook for small and medium enterprises (SME) is not as bright. The excise structure changed[when?] so that companies now have to pay a 16% tax on the maximum retail price (MRP) of their products, as opposed to on the ex-factory price. Consequently, larger companies cut back on outsourcing and what business is left shifted to companies with facilities in the four tax-free states – Himachal Pradesh, Jammu and Kashmir, Uttarakhand, and Jharkhand. Consequently, a large number of pharmaceutical manufacturers shifted their plant to these states, as it became almost impossible to continue operating in non-tax free zones. But in a matter of a couple of years the excise duty was revised on two occasions,[when?] first it was reduced to 8% and then to 4%. As a result, the benefits of shifting to a tax free zone was negated. This resulted in, factories in the tax free zones, to start up third party manufacturing. Under this these factories produced goods under the brand names of other parties on job work basis.
As SMEs wrestled with the tax structure, they were also scrambling to meet the 1 July deadline[when?] for compliance with the revised Schedule M Good Manufacturing Practices (GMP). While this should be beneficial to consumers and the industry at large, SMEs have been finding it difficult to find the funds to upgrade their manufacturing plants, resulting in the closure of many facilities. Others invested the money to bring their facilities to compliance, but these operations were located in non-tax-free states, making it difficult to compete in the wake of the new excise tax. Swas Medicare is one of the small scale leading pharmaceutical company of India , which is owned and founded by a Physician.
Largest companies[edit]
Sales, marketing, and business[edit]
- Multinational Pharmaceutical Companies ranked as per active presence of sales, marketing and business in India[15]
Publicly traded pharmaceuticals[edit]
| Rank | Company | Market Capitalization 2017 (INR crores) |
|---|---|---|
| 1 | Sun Pharmaceutical | Rs 1,55,716 Crore |
| 2 | Lupin Ltd | Rs 68,031 Crore |
| 3 | Dr. Reddy's Laboratories | Rs 49,293 Crore |
| 4 | Cipla | Rs 47,319 Crore |
| 5 | Aurobindo Pharma | Rs 41,283 Crore |
| 6 | Zydus Cadila Healthcare | Rs 31,631 Crore |
| 7 | Piramal Enterprise | Rs 30,975 Crore |
| 8 | Glenmark Pharmaceuticals | 25,302 Crore |
| 9 | Torrent Pharmaceuticals | Rs 22,742 Crore |
Biotech[edit]
| Rank | Company |
|---|---|
| 1 | Serum Institute of India |
| 2 | Biocon |
| 3 | Nuziveedu Seeds Private Limited |
| 4 | Novo Nordisk |
| 5 | Syngene International |
| 6 | Reliance Life Sciences |
| 7 | Eli Lilly and Company |
| 8 | Bharat Serums |
| 9 | Biological E. Limited |
| 10 | Fortis Clinical Research |
| 11 | Novozymes South Asia |
| 12 | Ankur Seeds |
| 14 | Indian Immunologicals Limited |
| 15 | GlaxoSmithKline Pharmaceuticals Ltd |
| 13 | Bharat Biotech International |
| 16 | Tulip Group |
| 17 | Hafkine Biopharmaceutical |
| 18 | Mahyco |
| 19 | Advanced Enzymes |
| 20 | Raasi Seeds |
| Rank | Company |
|---|---|
| 1 | Serum Institute of India[18] |
| 2 | Biocon[19] |
| 3 | Jubilant Life Sciences[20] |
| 4 | Syngene International[21] |
| 5 | Biological E[22] |
| 6 | Nuziveedu Seeds[23] |
| 7 | AstraZeneca Pharma India[24] |
| 8 | Mahyco[25] |
| 9 | Bharat Biotech International[26] |
| 10 | GSK India[27] |
| 11 | Anthem Biosciences[28] |
| 12 | Metahelix Life Sciences[29] |
| 13 | Advanced Enzyme Technologies |
| 14 | Concord Biotech |
| 15 | Panacea Biotec |
| 16 | Ankur Seeds |
| 17 | Ecron Acunova |
| 18 | Zytex |
| 19 | Accurex Biomedical |
| 20 | Bhat Bio-Tech India |
Relation between pharma and biotech[edit]
Unlike in other countries, the difference between biotechnology and pharmaceuticals remains fairly defined in India, with biotech a much smaller part of the economy. India accounted for 2% of the $41 billion global biotech market and in 2003 was ranked 3rd in the Asia-Pacific region and 13th in the world in number of biotech. In 2004-5, the Indian biotech industry saw its revenues grow 37% to $1.1 billion. The Indian biotech market is dominated by bio pharmaceuticals; 76% of 2004–5 revenues came from bio-pharmaceuticals, which saw 30% growth last year. Of the revenues from bio-pharmaceuticals, vaccines led the way, comprising 47% of sales. Biologics and large-molecule drugs tend to be more expensive than small-molecule drugs, and India hopes to sweep the market in bio-generics and contract manufacturing as drugs go off patent and Indian companies upgrade their manufacturing capabilities.[30]
Most companies in the biotech sector are extremely small, with only two firms breaking 100 million dollars in revenues. At last count there were 265 firms registered in India, over 92% of which were incorporated in the last five years. The newness of the companies explains the industry’s high consolidation in both physical and financial terms. Almost 30% of all biotech are in or around Bangalore, and the top ten companies capture 47% of the market. The top five companies were homegrown; Indian firms account for 72% of the bio-pharma sector and 52% of the industry as a whole.[4,46] The Association of Biotechnology-Led Enterprises (ABLE) is aiming to grow the industry to $5 billion in revenues generated by 1 million employees by 2009, and data from the Confederation of Indian Industry (CII) seem to suggest that it is possible.[31]
Comparison with the United States[edit]
The Indian biotech sector parallels that of the US in many ways. Both are filled with small start-ups while the majority of the market is controlled by a few powerful companies. Both are dependent upon government grants and venture capitalists for funding because neither will be commercially viable for years. Pharmaceutical companies in both countries see growth potential in biotechnology and have either invested in existing start-ups or ventured into the field themselves.[3]
Government support[edit]
The Indian government established the Department of Biotechnology in 1986 under the Ministry of Science and Technology. Since then, there have been a number of dispensations offered by both the central government and various states to encourage the growth of the industry. India’s science minister launched a program that provides tax incentives and grants for biotech start-ups and firms seeking to expand and establishes the Biotechnology Parks Society of India to support ten biotech parks by 2010. Previously limited to rodents, animal testing was expanded to include large animals as part of the minister’s initiative. States have started to vie with one another for biotech business, and they are offering such goodies as exemption from VAT and other fees, financial assistance with patents and subsidies on everything ranging from investment to land to utilities.[32]
The biotechnology sector faces some major challenges in its quest for growth. Chief among them is a lack of funding, particularly for firms that are just starting out. The most likely sources of funds are government grants and venture capital, which is a relatively young industry in India. Government grants are difficult to secure, and due to the expensive and uncertain nature of biotech research, venture capitalists are reluctant to invest in firms that have not yet developed a commercially viable product.[33]
The government has addressed the problem of educated but unqualified candidates in its Draft National Biotech Development Strategy. This plan included a proposal to create a National Task Force that will work with the biotech industry to revise the curriculum for undergraduate and graduate study in life sciences and biotechnology. The government’s strategy also stated intentions to increase the number of PhD Fellowships awarded by the Department of Biotechnology to 200 per year. These human resources will be further leveraged with a "Bio-Edu-Grid" that will knit together the resources of the academic and scientific industrial communities, much as they are in the US.[33]
Foreign investment[edit]
An initiative passed earlier this year[when?] allowed 100% foreign direct investment in the biotech sector without compulsory licensing from the government.[citation needed]
