Re-Building Indian Pharma Inc

Recently the Government of India has identified 25 key sectors in which India has the potential of becoming a world leader and the pharmaceutical sector is one of them. And, with an aim to turn the country into a global manufacturing hub, to ensure that India is not treated as a ‘Market’, and to retain homegrown talent, on September 25, 2014, Prime Minister (PM) Narendra Modi (Just before his first visit to US after becoming the prime minister of India) launched the ‘Make In India’ campaign.

Responding to the ‘Make In India’ campaign, Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon comments, “Make In India campaign reflects PM Modi’s commitment to make India the preferred global destination for manufacturing. His assurance towards ‘Ease of Business’ and ‘Speed of Business’ through simplified rules and self regulation, is likely to win investor confidence and usher in a new wave of investments in the country.”

“India is likely to emerge as third biggest market globally in terms of volumes after the US and China. Word of caution ‘We need to commit to global quality standards’ to turn this vision in to reality and make India shine.” Dr Rajaram Samant, CEO & Chief Mentor, Akumentis Healthcare

Dr Rajaram Samant, Chief Executive Officer and Chief Mentor, Akumentis Healthcare says, “This is a great initiative by our PM to give push to Indian manufacturing sector. In fact, the pharma manufacturing sector is making news globally. India is likely to emerge as third biggest market globally in terms of volumes after the US and China. A word of caution ‘We need to commit to global quality standards’ to turn this vision in to reality and make India shine.”

Thus it seems that the ‘Make in India’ campaign has been received well within the country, however, the global scenario doesn’t seem very conducive for its success at this point of time.

Stiff competition

“PM Modi’s assurance towards ‘Ease of Business’ and ‘Speed of Business’ through simplified rules and self regulation, is likely to win investor confidence and usher in a new wave of investments in the country.” Kiran Mazumdar-Shaw, CMD, Biocon

China, one of our strongest competitors has also launched a similar, ‘Made in China’ campaign with a host of tax concessions to boost its manufacturing prowess. India imports nearly 60 -70 per cent of its required active pharmaceutical ingredients (APIs) from China and is still largely dependent on the Chinese APIs manufacturers.

Reputation at stake

Right before the Indian PM’s visit to US, Washington-based American Enterprise Institute (AEI) published the findings of a ‘study’ as a working paper in the National Bureau of Economic Research (NBER) series. The study claims to assess “the quality of 1470 antibiotic and tuberculosis drug samples that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries” based on samples “from pharmacies in 22 cities of 18 low- to mid-income countries between 2009 and 2012.”

The India Brand Equity Foundation (IBEF), on behalf of the Government of India (GoI), has taken a strong objection to the study and called it “a smear campaign being orchestrated by the AEI against the whole Indian pharma industry. It seems that the effort is to tarnish the image of the Indian pharma industry which it has painstakingly developed over the years and is often recognised as ‘Pharmacy of the World’”. The conclusions of the study are disputed not only for methodology and ethics but also for the poor treatment of data sampling used.

“There seems to be a deliberate campaign to malign the Indian pharma industry.” Dr P V Appaji, Director General, Pharmexcil India

Protesting against the study, Dr PV Appaji, Director General, Pharmexcil India highlights the lack of ethics in the study and says, “There seems to be a deliberate campaign to malign the Indian pharma industry. The minimum requirement would be to give an opportunity to the labelled manufacturers to give their comments against their test observations.”

“It is incorrect to say that Indian companies are not following set standards and are incapable of delivering quality medicines to the world. If it was indeed so, the exports would not have grown year after year at 18 to 20 per cent per year and reached $13 billion.” D G Shah, Secretary General, Indian Pharmaceutical Alliance

DG Shah, Secretary General, Indian Pharmaceutical Alliance (IPA) takes up a strong stand and says, “The study recognises that products with “Made in India” label may not be actually made in India. The study also recognises that transportation and storage conditions could have impacted the quality of products. But ignoring these realities, it still attributes poor quality (of drugs at the consumer end) to manufacturers and the Indian pharma regulator.” This is not only strange but reflects of a smear campaign with an ulterior motive rather than actually being concerned about quality issues.”

Appaji points out at least eight technical issues with the sampling and data techniques, “Samples were not authenticated either from the source or from the regulators of the local country; samples were not referred to manufacturers to ascertain their genuineness. Authors have not ascertained the source of supply of the drug and not indicated in the report. They directly pointed out that they are from India; the names of the manufacturing firms were not disclosed; the study fails to indicate the reference standards used. Based on the above observations, the report has no value on the face but they have published this report to damage the image of India in the international market.”

Sudhanshu Pandey, Joint Secretary, Department of Commerce, Government of India comments, “Quality is one of the major focus for pharma exports from India. Indian companies meet the quality requirements of all our importing countries. India looks at healthcare as a holistic issue rather than just commercial business.”

US FDA alerts

In the last one and half years’, India’s reputation as ‘Pharmacy of the World’ has been somewhat tarnished in the global pharma space. Pharma exports from India to the US have been in the news, but for the wrong reasons as there have been constant regulatory alerts from the US FDA authority.

India has the maximum number of US FDA approved facilities outside the US, but in the last one and half years many Indian pharma firms have received warning letters, 483s or import alerts due to data reliability/ integrity issues. Ranbaxy, Wockhardt, Sun Pharma are the most affected Indian pharma firms and there are many more mid- sized pharma companies who have come under the US FDA scanner in the recent past. India is not the only country who has been receiving the US FDA warning letters. Pharma firms from other countries including the US and Europe have also received warnings from the US regulatory authority, yet the slant put on the warning letters received to Indian firms have been completely different. As a result the brand reputation of the Indian pharma industry has been adversely impacted.

On a larger spectrum it shows that Indian pharma companies are not following set standards and are incapable of delivering quality medicines to the world. It also questions the capability of the Indian regulatory mechanism as many of these manufacturing facilities (Under US FDA scanner) are approved by the Indian regulators. However, the Indian pharma industry believes that it is being victimised and the hype has hurt the image of Indian pharma industry.

Shah says, “It is incorrect to say that Indian companies are not following set standards and are incapable of delivering quality medicines to the world. If it was indeed so, the exports would not have grown year after year at 18 to 20 per cent per year and reached $13 billion.”

“The basic weakness in Indian regulatory framework is that we lack a central regulatory authority that is similar to US FDA.” Dr Ajit Dangi, President & CEO, Danssen Consulting

Commenting on the US FDA warning letters, Dr Ajit Dangi, President and Chief Executive Officer, Danssen Consulting says, “Statistically, incidence of the number of such US FDA warnings compared to the total number of US FDA approved manufacturing facilities and ANDA/DMF/ FTFs granted which are highest in the world outside US, appear to be hyped.”

He emphasises, “It is important to distinguish between GMP non-compliance and outright frauds. For instance, the Ranbaxy matter came to light due to whistle-blowing by its own scientist Dr Dinesh Thakur.” He also admits, “The primary responsibility for producing and marketing a safe and efficacious product is that of the manufacturers. This is why the quality assurance starts from the top management of the company. If the CEO of the company is not conscious about the quality standards the same cannot be imbibed in the junior level personnel. Hence, the top management needs to be fully aware of implications and the risks involved in non conformance of quality.”

“The hype with respect to India is more to put down the image of the Indian pharma industry, which is providing pharma to more than 200 countries.” S V Veerramani, President, IDMA

SV Veerramani, President, IDMA informs, “I think, the multiple warning letters are confined to a few companies and more so in the areas of documentation, rather than the quality of the finished products. The hype with respect to India is more to put down the image of the Indian pharma industry, which is providing pharma products to more than 200 countries.”

He further adds that Indian pharma companies has come a long way and today is considered as one strong force which can really take on the world market. He further recommends immaculate and legible documentation, proper following of laid down QMS and recording of data with scientific reasoning for further progress of the Indian pharma in the next couple of years at a fast pace.

However, the industry also accepts that there is an urgent need to rebuild the image of Indian pharma and bring back the trust that it has lost.

Image re-building

“We are working with industry stakeholders, including regulators, to ensure Indian pharma’s positioning as a responsible healthcare provider.” Aparna Dutt Sharma, CEO of India Brand Equity Foundation

Speaking on the measures being implemented to achieve this aim, Aparna Dutt Sharma, Chief Executive Officer, India Brand Equity Foundation (IBEF) comments, “India is known as the pharmacy to the world. The recent opening of markets like Argentina and the opportunities in Japan, indicate the position that Indian pharma occupies in the world. We are working with industry stakeholders, including regulators, to ensure Indian pharma’s positioning as a responsible healthcare provider.”

Pointing out that regulators play an important role in buildingt the image of an industry in the global market, Dangi says, “The basic weakness in Indian regulatory framework is that we lack a Central Regulatory Authority that is similar to the US FDA. The Union Cabinet proposed and approved the formation of Central Drug Authority (CDA) way back in the year 2005, however, due to vested interests, the plan was put on a back burner. While India has Central Drugs Act, its implementation is carried out by states in varying forms. While some states like Maharashtra, Gujarat, Karnataka etc. have a reasonably good regulatory set up, some of the smaller states have a very weak set up to say the least. Unfortunately, drugs manufactured in such states can be marketed all over India.”

Thus while the country has some good examples of streamlines regulatory processes, there is a need to implement them across India backed by good governance. Veeramani opines, “Current crop of regulators, be it state or central, there is a good trend in their approach which can be seen during respective GMP audits. It would do good to many serious pharma players if the regulators can play the role of mentors than regulators. Indian regulators can also participate actively in the International Forums of Global Regulators.”

Dangi spells, “If this trend continues, not only it will tarnish the reputation of Indian pharma industry globally but may impact ANDA/DMF / FTF approvals due to additional scrutiny resulting in more delays in drug approval process.”

He continues, “Now that the US FDA has a dedicated team for India, led by US FDA Country Director, India, Dr Altaf Lal, industry seniors should have a continuous dialogue with them to understand the US FDA requirements and to iron out any real or perceived differences to maintain our reputation of being a reliable source of quality medicines at affordable prices.”

Mazumdar sums up and says, “Modi’s commitment to FDI, ‘First Develop India’, resonates well with the industry. India needs to align democracy, demographic dividend and demand to make India the global manufacturing hub. However, we need to benchmark some of our policies related to manufacturing, labour laws, land acquisition, environment, health and safety, with some of the best countries in the world. We must address infrastructure challenges related to power and water, roads and railways on priority for ‘Make In India’ campaign to be really successful.”

The way forward

Recognising the need for some constructive action to mitigate the challenges in Indian pharma and bring it back to its earlier glory, the Government of India and major pharma industry organisations namely Indian Pharmaceutical Alliance (IPA), Indian Drug Manufacturers’ Association (IDMA), Association of Biotechnology Led Enterprises (ABLE), Bulk Drug Manufacturers Association (BDMA), Pharmaceutical Export Promotion Council of India (Pharmexcil) and India Brand Equity Foundation (lBEF) have come together to form the ‘India – Responsible Healthcare Trust’ to power the Brand India Pharma campaign, which was launched under the aegis of the Department of Commerce at CPhI Japan in March 2012.

A one-of-its-kind public-private partnership, the formation of the Trust represents the commitment to both drive and safeguard the interests of the Indian pharma industry. The Trust chaired by the Commerce Secretary comprises key stakeholders from above mentioned associations. It aims to combine both financial and non-financial resources towards a common agenda, create better awareness and develop an informed perspective about ‘Brand India Pharma’ in both the domestic and global markets. This spreads a strong message to the world community.

On an inaugural launch of the entity, Rajeev Kher, Commerce Secretary, Government of India. highlights, “The India – Responsible Healthcare Trust will spearhead the Brand India Pharma initiative through the second phase. The industry-government partnership is an important milestone in the campaign. ”

Hopefully, the government’s new initiatives and industry associations’ efforts will help the industry to overcome all the challenges and pave the path for further progress.

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