India, the world's refuge for affordable medicines

The Indian pharmaceutical industry, which ranks third largest in the world in volume terms and 10th largest in value terms, has emerged as an important producer and supplier of affordable medicines. As the world’s largest producer of generic drugs, the industry makes significant contribution towards making available affordable medicine to people in many parts of the world.

It has placed the country on the map of the pharmaceutical world and built a brand image for itself.
From India’s perspective, by  exporting pharmaceutical products to almost all countries including mature markets such as the US, European Union, and Japan, it earns the much needed foreign exchange. The industry also deserves praise for creating quality jobs.

Saved lives of millions

At the global level, the industry has made significant contribution in saving the lives of millions and in bringing down the prices of lifesaving drugs used to treat diseases such as HIV, TB and cancer by as much as 90 per cent. Programmes such as the US President's Emergency Plan for AIDS Relief (PEPFAR) and Clinton Foundation use drugs from India.

The best tribute to its contribution to the world came from UNAIDS executive director Michel Sidibe when he said: “Millions will die if India cannot produce new HIV/AIDS medicines in the future — it is a matter of life and death.”

While speaking at a function in Mumbai in 2013, former US president Bill Clinton publicly lauded the efforts of Indian generic pharma companies like Cipla and Ranbaxy to supply cheap drugs to HIV AIDS patients in Africa and said: “I want to use the opportunity to also thank Indians for the remarkable work they have done in this respect.”
Indian pharmaceutical industry’s contribution towards bringing down the cost of healthcare is also equally impressive. According to the fifth annual report of the Generic Pharmaceutical Association (GPhA), generic pharmaceuticals saved the American health system and patients $217 billion in 2012 and around $1.2 trillion over the last decade.

“The generic pharmaceutical industry continues to generate unprecedented savings for the US health system,” said Ralph G Neas, president and CEO of GPhA.

The Indian pharmaceutical industry is largely homegrown. What made it possible for the industry to gain global recognition and make laudable contribution is its access to a strong pool of scientific and technical human resources at affordable costs and the earlier government patent policy relating to drug patents.

The two key provisions in the Patents Act that India enacted in 1970 facilitated domestic pharma firms to carve out a niche for themselves and scale greater heights. The first was the nod to allow patenting of the process, instead of the product (the drug).

The second was the shortening of the life of pharmaceutical patents. As a result, the Indian pharmaceutical industry currently has around 300 registered pharmaceutical firms with over 100 of them US Food and Drug Administration (FDA) approved.

In comparison, China and Italy have around 30 and 55 FDA approved facilities respectively. It produces formulations in various dosage forms and active pharmaceutical ingredients (API) belonging to almost all major therapeutic groups. It has developed the necessary sophisticated processing technologies and operates GMP-compliant production facilities.

The industry, having a strong presence in the generic and vaccine markets, has a bright future in both the domestic and export markets.

In the domestic market, increasing affluence and greater awareness about health and hygiene issues among people, higher incidence of lifestyle-related diseases, and increasing government expenditure on healthcare spur the growth of the pharmaceutical market.

On the export front, increasing cost of providing healthcare in countries across the world provides the impetus for generic drugs, India’s forte.

According to industry reports around $60 billion–$70 billion worth of drugs are expected to go-off patent in the next few years and with Indian pharmaceutical companies accounting for almost 35 percent of the Abbreviated New Drug Application (ANDA) approvals granted by FDA, the domestic industry finds itself in a sweet spot.

India’s laws inspire others

If all goes well, the Indian pharmaceutical industry would be a $50-billion industry by 2020, according to a PwC report entitled ‘Global Pharma Looks to India: Prospects for Growth’. This is achievable if the industry is  alive to the challenges it faces. One, on the quality front; and the other on the new patent laws enacted because of the country’s obligations to implement the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

The new patent law provides product patenting and this empowers global pharma majors to take legal recourse.  While companies and the industry have to work in cohort to effectively address regulatory compliance issues, the government has to ensure that the patent laws are not diluted due to pressure from vested interested groups.

Until now the government has played its part well despite pressures from interested quarters. While switching over to product patent regime in conformance with the country’s commitment to the WTO, necessary compulsory licensing provision that enables Indian companies to manufacture medicines under specified provisions such as giving manufacturing rights to Indian companies after paying a 'reasonable' royalty to the innovators has been incorporated.

Also the Patent Act has tighter definition of what can be patented. Now only drugs, which make a technical advance or have economic significance, can get a patent. It also restricts a pharmaceutical company from renewing its patent every time it expires, citing a new use for the same drug. It gives companies more grounds and time to challenge a patent claim even before it's granted.

India a legal battleground

The existing provisions of the patent law have been challenged in Indian courts and the country is emerging as the global pharma industry’s battleground.
A recent court decision, in the case relating to Novartis’ request for fresh patent for its leukemia drug, Gleevec, is a landmark one.

While rejecting the company’s claim of introducing a new formulation, the court determined that the new Gleevec was virtually identical to the old one and thereby upheld the Indian patent office's rejection of the patent application. 

It is one example of a pharmaceutical company’s attempt to evergreen the patent for a blockbuster and thereby thwart efforts to produce generic version at cheaper prices.
While the court ruling sent shockwaves across the drug industry, organisations interested in affordable healthcare welcomed it wholeheartedly. 

In March 2012, India granted its first compulsory licence. The license was granted to Indian generic drug manufacturer Natco Pharma for sorafenib tosylate (Nexavar), Bayer’s patented cancer drug. After failing in its attempt to get voluntary licence from Bayer, Natco applied to the Controller General of Patents for a compulsory licence under sections of the Patent Act to manufacture and sell the drug and obtained the licence.

Thereafter, Bayer filed an appeal challenging the order of the Controller before the Intellectual Property Appellate Board (IPAB). The IPAB, in March 2013, dismissed the appeal and upheld the decision of the Controller. Later Bayer challenged IPAB’s order before Bombay High Court, which too upheld IPAB’s order.

Based on these and other case studies, countries like China, Argentina, and Thailand have either adopted or are adopting similar patent regulations empowering themselves with the flexibility to produce generic versions of essential life-saving drugs in national interest. 

Needed: better quality controls
In recent times, however, domestic drug firms have received adverse publicity arising from the sounding of alarm bells by the US Food and Drug Administration (FDA). Some of India’s leading pharmaceutical firms are seen having problems in ensuring compliance with FDA regulations.

FDA inspections have put leading Indian companies like Ranbaxy, Cadila, Sun Pharma, and Wockhardt under the lens over questions on data integrity. It has also initiated actions against some of them. Ranbaxy’s multiyear regulatory battle with FDA shows the domestic pharmaceutical industry in poor light. In its much discussed report ‘Dirty Medicine’, Fortune magazine highlighted the data integrity travails of Ranbaxy.

The article highlights that the findings are not a tale of cutting corners or lax manufacturing practices, but something more serious. There are other such cases.  The warning letter issued by FDA in November 2014 accuses Cadila of failing to have in place “proper controls … to prevent the unauthorised manipulation of electronic raw data.”

FDA’s letter to Sun Pharma pointed out that its inspections have revealed the deletion of chromatograms on a company’s computer and went on to highlight that the “pervasive practice of deleting files" is unacceptable.
FDA’s warning letter to Wockhardt said it was “particularly concerned about the inability to implement a robust and sustainable quality system".
These issues fall entirely within the spheres of control of the respective companies and the industry.

The companies and the industry have the necessary competence to address these issues and the technology is available.

It only requires that, as they carry on with their legal battles, they must also revisit their standard operating procedures (SOP) and current good manufacturing practices (cGMP) and invest in enabling technology solutions.

 The title of the Standard & Poor’s report, ‘Indian Pharmaceutical Companies Have a Global Opportunity, If they Conquer Compliance Issues,’ highlights the industry’s global growth opportunities and the imperatives.

(The author is an independent
industry analyst/columnist and
automation consultant)