Generic medicines in india promulgating growth & access
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Generic Medicines in India Promulgating Growth & Access
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Generic medicines in india promulgating growth & access
- 2. About Us • Started in 2002, with the aim of providing multiple services to companies wishing to engage in any business expansion • Provide actionable insights to companies across a range of industries such as Food, and Healthcare • Well equipped offices in India and Dubai, also present in 20 countries and 5 cities in India through channel partners • Dedicated team of over 35 employees and 15 freelancers, with rich industry experience and domain expertise Services Strategic Consulting • In-Depth Market Assessment • Market Entry Strategies • Concept & Product Testing • Existing Business Optimization • Strategic Advisory
- 3. • Old Age Group (Above 65 years of age) is 5% of the country’s total population (1.2 Billion) • One out of four Indians is at risk of dying from non- communicable diseases like diabetes, cardio-vascular ailments or cancer before 70 years of age • India had the second highest diabetic population after China in 2013 • India ranked third in number of obese (BMI > 30) cases (30 Million in 2013) • Cardiovascular Diseases accounted for 2.5 Million deaths, 26% of the total deaths in India in 2013 • Cancer cases are likely to increase by 9% from 2014-2020, propelling the growth of cancer generics Source: IDF 65.1 101.2 2013 2030 Diabetes Population in the Age Group 20-79 Years (Million) Source: CSO 58.5 60.2 59.3 60.1 60.9 61.7 56 57 58 59 60 61 62 56 57 58 59 60 61 62 2009 2010 2011 2012 2013 2014 Population (Million) Above 65 years (Million) Ageing Population
- 4. • Domestic Pharma market accounted for 1.4% by value and 10% by volume in the global pharma market in 2014 • Total Pharma production was US$ 31 Billion in 2014 • India exports drugs to more than 200 countries with the US and Europe being the major markets. • Market is dominated by Branded Generics with a share of around 80% • Conditions favoring manufacturing, increasing disposable incomes, surging lifestyle diseases and increase in investments favoring growth 15.4 17.4 19.6 22.2 25.1 28.6 32.7 2014e 2015f 2016f 2017f 2018f 2019f 2020f Domestic Pharma Market (Billion US$) Branded 25% Generics 75% Share of Branded vs. Generics (%) 2014 Source: RNCOS: Source: : RNCOS
- 5. • Anti-infectives is the largest segment, dominated by Cipla and Ranbaxy (now a part of Sun Pharma) • Indian manufacturers have limited penetration in the gastro- intestinal segment with players such as such as Lupin, and Aurobindo Pharma • Analgesics/pain market is highly competitive with the presence of Ranbaxy, Wockhardt, GSK, Zydus Cadila, and Piramal • Other major segments include dermatology, gynecology, oncology, anti-depressants, Thyroid, etc. 11.6 13.1 14.9 17.2 20.1 23.5 27.9 2014e 2015f 2016f 2017f 2018f 2019f 2020f Generics Drugs Market (Billion US$ ) Anti- Infectives 16.0% Cardiovascul ar 12.5% Gastro- Intestinal 10.0% Respiratory 8.5% Vitamins, Minerals 7.0% Pain, Analgesic 6.5% Anti- Diabetes 6.5% Others 33.0% Revenue Share of Major Generics Segments (%) 2014Source: RNCOS Source: RNCOS: • Indian Generics market has a 3.7% share in the global generic drug market by value • Generics are likely to account for an 85% share in the domestic pharma market by 2020. • The country is a leading manufacturer of cheaper AIDS and Tuberculosis drugs • Sun Pharma, Lupin, Cipla, Dr. Reddys Laboratory and Aurobindo Pharma are some of the major players
- 6. West 48% North 25% South 17% East 10% Break up of Pharma Clusters by Regions Region Cities West Mumbai Ahmadabad Vadodara North Delhi Solan Chandigarh South Hyderabad Chennai Bangalore East West Bengal Kolkata Source: Pharma Directory 2012-2013:
- 7. Rising Healthcare Expenditure Ongoing Patent Cliff Surging Lifestyle Diseases Favorable Government Policies Revision of Patent Laws Lack of Awareness Weaker Supply Chain Management Lack of Price Control Lack of Promotion Competition from Branded Drugs Drivers Challenges
- 8. Parameters 2008 2013 Eligibility NGOs / Hospitals / Charitable / Cooperative /Government Bodies having minimum of three years experience NGO unemployed pharmacists/ doctors/ registered medical practitioners/ charitable society/institution/ Self Help group having 3 years of exp. Location of Stores In Govt hospitals premises Outside premises of Govt. hospitals Number of Medicines 319 361 Number of stores 157 (630 districts not covered ) 3000 (coverage to whole country) Authority to open JAS stores State Govt recommend the operating agencies and confirmed by BPPI Applicants directly approach BPPI to run stores in own space or hired space Jan Aushadhi Scheme (JAS) – Launched 2008, Revised 2013 Free Essential Drug Scheme- Launched 2013 Centre to provide 50 essential drugs in states like antibiotics and anti-diabetic drugs, among others Telemedicine “Sehat”- Launched 2015 Centre to initiate Tele-consultation services with Apollo Hospitals across 60,000 Common Service Centres (CSCs)
- 9. • Capitalizing on unbranded generics market through revival of Jan Aushadhi Scheme • Unbranded Generics must leverage distribution channels like hospital procurement channels. • Increase practice of compulsory licensing that would promote the market for Generics • Re-modeling of Product Pipeline by focusing on new therapeutic segments, new drug delivery methods, and developing value added generics with improved ADME (absorption, distribution, metabolism, and excretion) capabilities • Expanding distribution to UP, Rajasthan, Haryana, Punjab, and North East Regions • Exploring new export markets such as Russia, Japan and other GCC countries
- 10. • State governments should work closely with third party supply chain operators to open more warehouses and retail outlets. • Government should consider opening JAS retail stores in private hospitals • Integration of schemes like “M “(Manufacturer) and “W” (Wholesaler) through which discounts and rebates can be offered by generic manufacturers to wholesalers and pharmacists to enhance the dispensing of their generics • Information-supplying programs should be employed by manufacturers to facilitate a choice of medication that is safe, effective, and affordable • Introducing Financial incentive to medical practitioners for prescribing unbranded generics • Government should implement measures like 4Es (education, engineering, economics and enforcement) to increase prescription of generic drugs • Introduction of Generic Drug User Fee Act to speed access to safe and effective generic drugs to the public and reduce costs to industry.
- 11. SHUSHMUL MAHESHWARI CEO RNCOS E mail: shushmul@rncos.com Website: www.rncos.com Phone: +91 120 4224700 /01 / 02/ 03 Address: A-142, Second Floor, Sector 63, Noida, Uttar Pradesh India - 201301 Contact
Editor's Notes
- Drivers: Rising Healthcare Expenditures The Indian population has witnessed a steady rise in healthcare expenditure from 3.8% of the GDP in 2011 to 6% of the country’s GDP in 2014. The major chunk of the population (nearly 40% of Indians) live on less than US$1 per day and most of them have to pay out of their own pockets for medical services. Out-of-pocket spending in India is over four times higher than public spending on healthcare. The direct out-of pocket payments have pushed 2.2%% of all healthcare users and one-fourth of all hospitalized patients, into poverty during 2014. Thus, the progressive rise in healthcare expenditures has forced the government and private health insurance players to seek ways to control healthcare costs. Generic drugs play an essential role in alleviating the high costs of the healthcare system. These drugs are priced 80-85% lower than their branded counterparts. This pressure creates an increasing demand for generic drugs versus branded counterparts. Ongoing Patent Cliff A rise in geriatric population across the globe is making the countries move to cheaper APIs and formulations which are India’s strengths. It is estimated that around US$ 40 Billion worth of drugs in the US and US$ 25 Billion worth of drugs in Europe will be going off patent (series of patent expirations of important prescription drugs) in the coming years. Patent expiry of Lipitor by Pfizer, Diovan by Novartis, Plavix by Bristol-Myers Squibb etc. have already pushed Indian generic players to expand in international markets. Subsequently, some of the other global pharma majors such as Teva, Glaxosmithkline and Allergen are likely to lose patent exclusivity of several drugs. Therefore, the patent cliff is giving significant opportunity to Indian manufacturers to develop generic versions of respective patented drugs. India is a major market for generic drug manufacturing in the world, followed by South Korea and Japan. Point 3, 4, 5 already discussed in above slides (4,5) Challenges: Monopoly of Doctors in Prescribing Branded Medicines Currently, fast moving branded medicines are manufactured by MNCs or large Indian companies. The branded medicines are usually expensive as they are strongly promoted through doctors and chemists and such promotional costs add to their retail prices, i.e., Maximum Retail Price (MRPs). The practice of bribing doctors by pharmaceutical companies to create more and more prescriptions is one of the major hurdles for the generics demand. It has been observed that there is a strong lobby between pharmaceutical distributors and district medical officers. The monopoly of providing branded medicines through specified medical stores has been limiting the reach of middle class and poor patients to generic medicines. Furthermore, a majority of the physicians does not prefer generic medicines due to less business offered by these drugs. This adds to the out of pocket expenditure on healthcare facilities. Lack of Price-Control India is a branded generics dominated market. The companies are very possessive of their Brand Names and Brand Image. Most of them go out of the way to nurture and protect their brand names and hence will always ensure the quality and packing of the product. Hence, most of the drugs sold in the country are branded generics. These medicines are usually expensive as they are strongly promoted through doctors and chemists and such promotional costs add to their retail prices, i.e., Maximum Retail Price (MRPs). On account of the lack of price control measures, consumers in India end up paying higher price for the majority of branded generics. The higher prices of medicines are a result of the commission being charged by pharmacist/pharmacies for recommending a particular company’s drug to the consumers. If the companies sell their drugs without having to indulge in promotions through pharmacists, patients/hospitals would get the same medicines at lower prices. Weak Supply Chain Management Though India has been a manufacturing hub for generic medicines, the majority of the population is unable to get benefits of cheaper drugs. Ee though the central government took initiatives to provide generic medicines through retail stores free of cost, the execution of the programme was limited to a few hospitals as the infrastructure for procurement and distribution is not put in place. There is no equal regional distribution of such stores in the country. Jan Aushadhi retail chains have been opened only in eight states including Punjab and Rajasthan with Rajasthan having more than half the total Jan Aushadhi stores in India. All Jan Aushadhi stores in Rajasthan are run by Rajasthan State Consumer Co-operative Federation. Stores in other states are mostly operated by the Red Cross. Other states are devoid of JAS stores. States such as Gujarat and Tamil Nadu do not have plan to open such stores in the future. Also, under this programme, 319 generic drugs were identified to be supplied through these stores, but only 85 drugs belonging to 11 therapeutic groups are sold. According to the scheme, there were 112 JAS, out of which 107 have been operational. More than half of the Jan Aushadis are shutting down because of fundamental flaws such as a weaker supply chain management system and the huge task of engaging physicians to prescribe generic medicines. Several drug stores have been running out of stock due to poor supply chain and distribution network. Lack of Promotion In several cases, drug companies follow unethical promotional strategies that push consumers to spend heavily on branded medicines. Generic drugs are released only after the originator loses its license. Replacing generics over the branded brings new challenges for the players. Players involved in manufacturing of generic drugs have been unsuccessful in promoting their generic drugs. This is due to the lack of investment in promotion and marketing activities. The government has also been less focused to generate awareness about the potency of generics. To promote affordable drugs, the Government set up the Jan Ausadhi scheme during 2008, whose objective was to open generic drug stores around the country. However, due to the lack of proper implementation, the scheme failed to meet the target of distributing generics across the country. Quality Control Despite the efforts of government to push generic drugs in India, there is less attention paid to their quality. Generic drugs are chemical copies of the originator drugs and don’t go through clinical trials. The country only has a specific set of tests to check the chemical composition of a generic drug, rather than to ensure "bioequivalence" or its efficacy over the pioneer drug. Reportedly, there is no proper authority for testing quality of these drugs. India’s national drugs regulator, the Central Drugs Standard Control Organization, only has authority for newer drugs. The drugs that have been on the market for over four years are under the regulatory jurisdiction of state-level regulators, who are understaffed and, in some cases, corrupt. For instance Ranbaxy Laboratories Ltd., was pleaded guilty for fabricating data, committing fraud, and selling adulterated drugs in the US market. Similarly, anti-fungal drug Liposomal Amphotericin B used against kidney failures has been claimed to be of poor quality by ICMR. Furthermore, India does not have a limit on the number of companies that can be allowed to manufacture the generic version of a drug. Several companies are granted licenses to manufacture the generic version for specific originator drugs. For example, over a dozen pharma companies have been awarded the licenses to manufacture Liposomal Amphotericin B. Lack of Awareness In India, most people identify a product or commodity by a brand name. Even in the rural belt, people are aware of brand names than the commodity. The ‘brands’ have created a trust at a larger scale. When it comes to drugs, particularly the ‘Over the Counter’ (OTC), the majority of patients ask for the’ Brand’. An average person asks for a Crocin, Combiflam, Amoxil, etc., In general, patients go by doctors’ prescriptions in case of scheduled drugs (drugs that are fatal). It has been observed that nearly 70% of India's population lives in rural areas, and does not have access to well develop medical facilities. This group does not have knowledge about generics medication. They are unaware of the fact that generic drugs have potential to treat similar ailments at prices lower than the reference products.
- Leveraging different Distribution Channels Through government efforts to promote generic drugs by opening JAS stores across the nation, generic manufacturers have the opportunity to widen their distribution channel system. For instance, drug distribution channelized via government tenders is on rise with increasing evidence of Government involvement in drug procurement in states such as Tamil Nadu, Andhra Pradesh and Karnataka. This is due the fact that the majority of the generic players such as Sun Pharma, Dr. Reddy’s Laboratory, Cipla and Lupin are located in Western & Southern parts of the country. These companies have limited their supply chain to their own regions. The hospital procurement channel is another distribution channel that can be leveraged in other states. This channel is characterized by its organized nature and inherent legalities. Companies may have to remodel their current commercial channels to leverage the opportunity that these new channels offer. Capitalizing on Unbranded Generics Market Presently, the generics market in India is dominated by branded generics (an off-patent drug sold under a brand name) and this has been a potential roadblock for sale of unbranded generic products by domestic manufacturers. The revival of Jan Aushadhi Scheme and Free Essential drug scheme by the state & central government would provide ample opportunity to the domestic players to capitalize on unbranded generic drug sector. Revision of Patent Laws to Promote Generic Drug Manufacturers Indian patent law aims to curtail a process known as ‘evergreening,’ in which pharmaceutical companies make sometimes minor improvements to an old medicine, allowing them to renew their patent. Under India’s tough standards, modifications that do not improve the efficacy of the drug are not eligible for extended patents. Perhaps, India is a leading supplier of affordable HIV/AIDS and Tuberculosis medications and is the second leading provider of medicines distributed by UNICEF in the developing world. For instance, rejection of patent extension of Novartis innovator product by Indian Supreme Court during 2012 would open the doors for domestic manufacturers to develop cheaper drugs that are affordable for poor patient population. Similarly, issuing of compulsory licensing to the generic drug companies under the section 92 of Indian Patent Law would encourage domestic manufacturers. For instance, IPO granted first CL to the domestic company Natco against the anti-cancer drug by German pharma company, Bayer in 2012. The similar move has been taken for Roche's Herceptin (trastuzumab), a biotech drug for the treatment of breast cancer and Bristol-Myers Squibb's (BMS's) Sprycel (dasatinib) for the treatment of leukemia and Ixempra (ixabepilone) for the treatment of breast cancer. This would make easier for manufacturing of generic drugs in India. Remodeling of Product Pipeline Indian companies should focus on niche segments and products that involve a higher level of technology and complexity such as: New Drug Delivery Systems (NDDS): Indian companies can grab the opportunity presented by delivery-based drug systems. Technology-intensive products such as extended-release tablets, patches and inhalers may help companies create a more differentiated portfolio. Emerging therapeutic areas: With increasing healthcare awareness, growing geriatric population in the country, new needs are emerging, leading to new opportunities. Areas such as diabetes, respiratory, inflammatory disorders, oral contraceptives, etc. can be the potential focus segments. Value added generics: While niche and complex molecules are a part of the diversification strategy that companies can adopt to build a sustainable portfolio, value- added generics are a means to enhance present offerings. Indian companies must innovate and look at generating value from ‘super-generics’, which can deliver additional benefits – increased efficacy, improved ADME characteristics, etc., to patients Expanding Regional Presence Generic drug companies in India are confined to the Southern and Western regions. Thus, the performance of any drug manufacturer is affected by unequal distribution of its manufacturing plants and distribution channels in the domestic market. The revision of government policies such as technical training, funds allocation, opening of organized retail chains in states such as Rajasthan and Punjab as well as the encouragement of public private partnership in the industry would be an initiative welcomed by generic players to widen their regional location. New Export Markets (International) Several compliance issues and stringent quality control regulations in the US/EU markets are acting as restraints for generic exports. India derives major chunk of its export revenues from these developed markets. Markets such as GCC, Japan and CIS still remain untapped. For example, India’s presence in the world’s second largest pharma market, Japan, is merely 1%. However, ability of Lupin to successfully establish its footprint in Japan is a proven example for exploring other markets. In addition Indian generic manufacturers can look to establish their foothold in regulated markets such as South East Asia and Africa.
- Example of first point in road ahead : Baba Ramdev’s Patanjali Yogpeeth is looking forward to reach one lakh locations in India in the fast moving consumer goods (FMCG) market. The expansion will be done via franchise mode as well as company-owned stores. 4Es: Education refers to initiatives such as guidelines, benchmarking and academic detailing; engineering refers to organizational or managerial interventions such as prescribing indicators; economics refers to financial incentives such as physician financial incentives for achieving agreed prescribing targets[38] and enforcement refers to regulations such as prescribing restrictions Generic Drug User Fee Act aims to : Ensure that industry participants, foreign or domestic, who participate in the U.S. generic drug system are held to consistent high quality standards Expedite the availability of low cost, high quality generic drugs by bringing greater predictability to the review times for abbreviated new drug applications Enhance FDA’s ability to protect Americans in the complex global supply environment by requiring the identification of facilities involved in the manufacture of generic drugs https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCcQFjABahUKEwji2q6O6NXHAhVUB44KHWwKDWA&url=http%3A%2F%2Fwww.fda.gov%2Fdownloads%2FForIndustry%2FUserFees%2FGenericDrugUserFees%2FUCM282505.pdf&ei=5pblVeLPEtSOuATslLSABg&usg=AFQjCNHlQIr_-n6V7gkZ9iNO9yaFtu2zUg