Pulse

Mission Pharma needs Central push, Chinese inspiration

Rutam Vora | Updated on August 31, 2019 Published on August 31, 2019

Domestic drugmakers chart a growth path with one foot in generics and the other in emerging technologies

“Can we live in this world without generics,” asks a combative Pankaj Patel, Chairman of the Zydus Cadila Group, insisting that the generics story is anything but over. But that said, he adds, the Indian drug industry is also looking at emerging sectors and that is where it could do with some help from the Government. A model that has played out rather well in China.

“The future is going to be bio-similars, and biological drugs driven by innovations,” says Patel, optimistic that the industry has its foot in the generics and emerging segments. In fact, driven by this outlook, companies have even ramped up their research spends, says Patel. But for a collective sustainable growth of the industry, the responsibility lies largely with the government, say veteran pharma voices, echoing similar thinking.

The Indian government and its regulatory bodies have a bigger-than-ever role to play in driving the next wave of growth for the pharmaceutical industry, says Sudarshan Jain, Secretary General with the Indian Pharmaceutical Alliance, a platform of large domestic drugmakers. “Enabling policies and a supportive ecosystem will help the industry achieve Vision 2030,” he adds.

For instance, “we have been demanding a dedicated separate Ministry for Pharmaceuticals in the Central government that will give undivided absolute attention on the growth of the sector in the country,” he says, calling for a stable policy with an outlook of at least five years and a push for infrastructure.

Pointing out that it is the government’s role to create a conducive environment to attract investments in the pharma space, Jain says India has failed to capitalise on its past strength in making Active Pharmaceutical Ingredients (API) to reduce the reliance on imports.

But it’s the China experience that industry thinks India can emulate. The IPA points to the Chinese government’s interventions at the infrastructural and policy levels that helped the API industry grow at 14.7 per cent, to about $70 billion in 2016, compared to the 5-7 per cent growth of the global API market.

Cues from China

Some of the interventions by the Chinese government included larger Special Economic Zones, “about 10-15 times the size we see in India”, transport infrastructure for lower logistics cost, subsidised land, common waste processing and utilities, lower electricity and labour costs and flexible labour laws, besides the lower borrowing costs at 5-7 per cent as against 11-14 per cent in India. The Chinese Government also kick-started a new wave of regulatory and policy-level interventions to foster innovation locally. These included changes in approval process, rationalising clinical trial data and creating guidelines for digital healthcare, among others.

Government spending

Reiterating a long-standing plea, Jain urges the Government to increase government spends on healthcare from about 1.2 percent now to 2.5 per cent of GDP in the next five years and about 5 per cent by 2030, in line with the developed European and North American economies. In fact, there should be greater harmony between the policy on affordability and accessibility of drugs, and the one on viable and sustainable pricing structure for the pharma players, they point out.

Vision 2030

Despite the regulatory censure that many large companies face from the US regulator, pricing pressures and escalating manufacturing costs, the $ 38-billion pharmaceutical industry has held its ground, Jain says.

It is the fourth largest forex earner for the country with nearly 60 per cent of the world’s vaccines being made in India and almost 40 per cent of US oral solids going from India. And this success was built on distinctive capabilities in different areas of the value chain, such as manufacturing, product development and process innovation.

But destination 2030 is to double the Indian pharma industry’s global market share (by value) from the current about 3.6 per cent to about 7 per cent. And that can be achieved by companies tapping uncharted territories like China and Japan, developing technology platforms and next-gen APIs. It will also require homeground support, from the Government, say seasoned industry hands.

Published on August 31, 2019
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