Thursday, December 22, 2016

INDIAN PHARMA ON FLYHIGH MODE

India is on track to cement its position next year as a source of safe, effective and quality medicines at affordable prices, but a "growing trust deficit" with the government and regulatory headwinds can pose a serious roadblock to this journey.
The USD 32-billion generic-driven Indian pharma industry is eyeing a sea of opportunities as global demand for safe and quality drugs rises, especially in developed economies such as the US, the EU and Japan.
Apart from the trust deficit that was in full display in the year passing by, compliance with regulatory norms, particularly with USFDA, continues to be the proverbial Achilles heel for home-grown companies.
"The sector will continue to grow and become a major player in the world market as a source of safe, effective, quality medicines at affordable prices," Indian Pharmaceutical Alliance (IPA) Secretary General Dilip G Shah told PTI.
His optimism stems from "greater acceptance of Indian generics as safe and effective medicines".
Demographic pressure in the developed countries has made them limit their health expenditure, Shah said.
Industry body Organisation of Pharmaceutical Producers of India (OPPI) has hailed the government's move to introduce regulatory amendments to relax clinical trial guidelines and upgrade rules for good manufacturing practices (GMPs).
These are "in the interest of patient safety and help put India on the global research map", OPPI DG Kanchana T K said.
"The sector faces two major issues in the domestic market, viz. growing trust deficit between the industry and the government and breakdown of meaningful dialogue between the two," Shah remarked.
Asked about the challenges facing the industry, he said "(it's) the government's suo motu actions that could compromise India's IPR regime and hurt generics and absence of shared vision". While future looks rosy albeit with challenges, a lookback at 2016 is a pointer to the bitter pills that the industry swallowed during the year.
In March, the government banned 344 fixed dose combination (FDC) drugs, making pharma firms see red, which termed the decision "arbitrary, unfair and a letdown" and approached the Delhi High Court.
"Maximum litigation with pricing and drug regulators is the high point of 2016," Shah said when asked to sum up the events of the year.
"In the last one year, over 400 companies had to go to courts to resolve their grievances relating to pricing and drug regulatory decisions."
In a relief to the industry, the high court set aside the government's decision, saying the step was taken in a "haphazard manner" without consulting statutory bodies as mandated under the law and such drugs cannot be banned for any reason other than posing risk to consumers or having no therapeutic value or justification.
The temporary ban impacted sales of many companies though.
"Driven by volume, the industry has managed to report double-digit growth in the 12 months ended November 2016. However, it is unlikely to maintain that for 2016-17," Shah added.
The year also saw the National Pharmaceutical Pricing Authority (NPPA) fixing ceiling prices of drug formulations used for treatment of various diseases such as cancer, diabetes, rheumatoid arthritis, bacterial infections and hypertension, among others.
On the reforms front, the government allowed up to 74 per cent foreign direct investment in the existing pharmaceutical companies through the automatic route with an aim to promote the sector. Earlier, 100 per cent FDI was permitted through government approval.
The move assumed significance as FDI in the existing pharma firms has been a contentious issue as concerns have been raised over takeover of Indian companies by foreign giants that could hamper availability of low-cost medicines.
The change in FDI regulation was followed by in-bound multi-million dollar deals.
In the largest acquisition of an Indian pharma company by a Chinese firm, Shanghai Fosun Pharmaceutical Group Co agreed to buy Hyderabad-based Gland Pharma for about USD 1.26 billion (nearly Rs 8,500 crore).
Likewise, last month, the US-based Baxter International forged a definitive agreement to acquire Claris Injectables, a wholly-owned subsidiary of Claris Lifesciences, for approximately USD 625 million (Rs 4,237 crore).
Not to be left behind, Indian companies went full throttle with their global expansion strategy through acquisitions.
Notable among them is Piramal Enterprises which announced that it would acquire US-based contract development and manufacturing firm Ash Stevens for up to USD 52.95 million (over Rs 350 crore).
Strides Shasun also signed a pact to acquire Perrigo API India for Rs 100 crore.
But the worrying point is compliance issues faced by domestic firms vis-a-vis foreign health regulators.
Drugmakers such as Aurobindo Pharma, Alembic Pharma, Glenmark and Sun Pharma had their facilities inspected by USFDA and were asked to comply with the regulator's good manufacturing guidelines.
Some other firms such as Ipca Labs, Sri Krishna Pharmaceuticals and Wockhardt too received USFDA rap over manufacturing practices.
In 2016, seven Indian pharma players, including Aurobindo, Emcure, Hetero Labs, Laurus Labs, Lupin and Zydus Cadila, signed licensing pact with the UN-backed Medicines Patent Pool (MPP) to produce HIV and hepatitis C drugs.

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