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Orphan drugs have limited market share, but high value and margin

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Dr Piyush Gupta, Associate Director, GNH India- a renowned global pharma distributor, talks about the challenges in pharma exports, in discussion with Sachin Jagdale

How has the Indian pharma export industry evolved over the years? What kind of symbiotic relationship should be maintained between drug manufacturers and drug exporters?

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Dr Piyush Gupta

Indian industry was born out of the need to fulfil domestic requirements. To give you a background, until the 90s, exports was non-existent. However, it gradually started expanding in the overseas markets. By the year 2000, the industry evolved and received success to such an extent that over 50 per cent revenue was generated outside of India. And today, highest numbers of US FDA approved facilities are located in India.

Talking about symbiotic relations, they are still in the developing phase where manufacturers are focusing on manufacturing and exporters on international sales. In India, a majority of exporters of finished formulations are manufactures themselves, there are very few exporters (merchant exporters) without a manufacturing base, and most of them fall under the ‘unorganised’ category.

R&D has never been the strength of the Indian pharma industry. Do you really think that it is possible for the Indian pharma operators to manufacture drugs which are unique in nature? These drugs will again have unique logistics requirements during the export process…

I agree that R&D has not been our strength, as the industry was born to ‘fill the gap’, but with different innovations, at present we are trying to catch up on the R&D segment, as well.

In my opinion, rather than focussing on R&D for synthetic drugs, we should take a leaf from the rich legacy of ayurveda and find solutions to modern issues in our past.

Unique logistic requirements are mainly for biologic drugs where we need to transport ‘proteins’, ‘cells’ etc… also called ‘live’ content. If R&D is done from India by Indians for Indian issues, the unique logistic requirements can be mitigated altogether as the drug/ product can be adapted to Indian temperature conditions at R&D level.

In the last few years, many reputed Indian pharma companies have been pulled up by overseas regulatory authorities over quality related issues. As an Indian pharma exporter how does such events affect your business?

Today, the largest numbers of US FDA approved facilities outside of US are in India. Hence, it is obvious that we are going to be crosshair forregulators due to the sheer volume of our engagement with them. This should be taken in a positive spirit as it’s part of natural progression. Every country or industry goes through issues and currently it’s pharma from India. Such regulatory issues make things difficult for everyone, including exporters. The right way to address the issue is to take it on the chin – accept the mistake and take corrective action.

How is pharma manufacturing in India and pharma export policies interdependent? What kind of export policy changes/ modifications would you like to recommend?

Pharma manufacturing and exports does get affected by domestic policy because of the direct link. The present government is doing a good job and at this point no specific lacuna is coming to mind in terms of policies or notifications. But yes, I think, customs process can be made a lot simpler and these are more at the field level than the policy level.

Orphan drug segment has very limited market share. How does this category fit into your business model?

Orphan drugs have a limited market share, but high value and margin. In order to be called a ‘full line wholesaler’ orphans have to be a part of our portfolio. Orphan drugs is more of a service to the society than a money making business. If everyone ignores orphan drugs – where will the patients go?

What kind of opportunities and the challenges would you predict for the Indian pharma exporters in future?

As far as challenges are considered, I would like to highlight that the single most important challenge is the ‘image’ of Indian products, which still suffers considerably. The first question people ask us, even after 13 years in the business is “hope that the drugs are not counterfeit?”

There is an unequal distribution of medicines like every other commodity all over the globe. Some countries have all medicines while others lack even basics. The opportunity for us here lies in fulfilling these unmet needs across the globe. The total pharma market is estimated to around $340 billion of which close to $80 billion is wholesale trade – this is the domain we operate in and hope to become the champions from India in the future.

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