In the quest of true freedom

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India Pharma Inc has come a long way since independence, but three ‘Is’ namely, Indigenisation, Innovation and Information would play key roles in liberating its true potential

India is gearing up once again to celebrate its Independence Day. And we have a lot of things to rejoice about. Falsifying the predictions of disaster and doom when it became independent in 1947, India has grown from strength to strength to become the largest democracy and the sixth largest economy in the world.

Once called a ‘country of illiterates’, today India’s literacy rate is 74 per cent. Food grain production has grown manifold from 50.8 million tonnes in the 1950s to 272 million tonnes in 2016-17. Our life expectancy has increased considerably from 32 years in 1947, to 68.35 years in the current times. Since liberalisation and subsequent reforms in the 1990s, we have witnessed very rapid fiscal growth and development. Let’s not forget that India is the first country to enter into the orbit around Mars on its first attempt.

Thus, in the past 71 years as a sovereign nation, we have traversed a journey interspersed with several triumphs and achievements.

Yet, it is also very evident that we are still battling multiple challenges on different fronts. We have covered many miles, and kept many promises but we have many more miles to go and many more promises to keep. So, even as we laud our successes, it is important to introspect on our failings or shortcomings and restrategise to emerge as a stronger nation.

Hence, as a leading industry publication, Express Pharma, in its Independence Day Special issue, looks at battles that are yet to be won in the pharma sector and examines factors which will be game changers in future.

Our pharma sector too is one of our success stories and has been a huge contributor to India’s progress. Post-independence, the sector’s ability to provide quality, affordable and accessible medicines made it an important determinant of the country’s fiscal development as well. With rising exports of affordable medicines to various parts of the world from our country, it has earned global recognition as the ‘Pharmacy of the World’.

On the other hand, challenges such as the entry of foreign players, compliance issues, low margin of profits due to pricing pressures, low input for R&D etc. are dogging the heels of this industry and hindering its advance. There is growing over-dependence on drug imports from China, we are faced with the challenge of making the transition from imitative to innovative and haven’t mastered the art of utilising data effectively to leapfrog progress.

However, the answers to these challenges lie within themselves. Therefore we have identified three ‘Is’ i.e. Indigenisation, Innovation and Information as factors which would play key roles in mitigating our challenges and accelerating our development.

Let’s examine why they have emerged as such crucial elements of India Pharma Inc’s growth trajectory.

Indigenous success

The sector already owes a lot of its success to indigenisation. Soon after independence, India adopted a robust economic policy guided by the philosophy of self-reliance and self-sufficiency. Strategic interventions through incentives for localised production and regulation of prices enabled our country to develop and manufacture cost-effective medicines for domestic use and global markets.

Girish Arora, Founder & Managing Director, Alniche Lifesciences shares some vital statistics about the industry in the current day. He accentuates, “Today, India is the source of 60,000 generic brands across 60 therapeutic categories and manufactures more than 500 different active pharmaceutical ingredients (APIs). The export of generic drugs is one of India’s core strengths.

The country is home to 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities. The cost of production in India is around one-third of that in the US and almost half of that in Europe. Indian pharma sector supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in UK. Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS are supplied by Indian pharma firms.”

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As the leading trio from STEERLIFE, Dr Himadri Sen, Chairman, Steerlife; Indu Bhushan, CTO & Director, SteerLife India; and Dr Babu Padmanabhan, MD & Chief Knowledge Officer; also point out, “The Indian pharma industry has made significant multidimensional progress encompassing all essential components, processes and systems associated with development to commercialisation of drug products globally. There has been a constant spirit of innovation in reducing costs and providing affordable medical care to patients not only in emerging economies but also in developed economies.”

However, in a bid to provide very affordable medicines, over a period we have developed a very disproportionate dependence on China for active pharma ingredients (APIs) and bulk drugs. Our neighbouring nation accounted for 66 per cent of India’s total bulk drug imports in 2016-17 at Rs 12,254.97 crores.

This, in turn, has emerged as a mammoth threat to our progress. Be it about the quantity of supply and price or quality of finished products, this situation has allowed a lot of power to be vested with China, as far as our pharma sector is concerned. Given our geo-political situation, we need to be very careful about this fact. Hence, there is an urgent need to encourage domestic production of raw materials required for the life sciences industry. The move is also vital to retain India’s position as a leading generic drugs supplier in the global markets. At the same time, as we strive to move up the R&D value chain, the government’s policies and measures should encourage and ensure easy and affordable access to quality raw materials and equipment. It would also comprise enabling a more conducive environment for innovation and helping maintain our cost-competitiveness in the global market.

Fortunately, taking cognisance of these factors, the government is implementing various measures to reduce imports. For instance, since 2016, the government had withdrawn exemption in customs duties to certain categories of bulk drugs.

Similarly, a scheme under which common facilities in bulk drug parks will be financed by the government to develop the pharma sector by reducing cost of drug production has been approved. Measures like easier environment clearance are being enforced to boost domestic manufacturing of bulk drugs. Both, state and central governments are trying to boost manufacturing of pharma equipment as part of the ‘Make in India’ strategy as well.

Fostering innovation

The clear correlation between innovation and growth has dawned on the Indian pharma industry. Rishad Dadachanji, Director, Schott Kaisha, echoes the industry’s views when he says, “Innovation-led development should be a key strategy for all player in any industry today. Progress and prosperity is led by innovation and this ensures a strong and secure position for any industry in the global market.”

Drawing the bigger picture, Pushpa Vijayraghavan, Director, Sathguru Management Consultants also underscores, “It is time we see healthcare access beyond affordability – it is not sufficient to ensure low drug prices, it is also important that we can indigenously provide our population access to contemporary and emerging therapies.”

These considerations have also brought in a realisation that while our strategy of developing and marketing copies of patented chemical and biological drugs at discounted prices might have brought us this far, it wouldn’t suffice if we are seeking a leadership position in the global pharma industry. Its further advance will depend on the ability to generate new ideas, processes and solutions.

So, the industry would have to adopt innovation in a big way, be it in plant design, drug discovery or drug delivery systems. However, as Sen, Bhushan and Padmanabhan point out, “To build the ecosystem for new drug discovery and research may remain an endeavour with high level of unpredictability, cost and time.”

Hence, India Pharma Inc would also need to galvanise its efforts and policies on innovation into a more coherent, national level strategy. The situation demands significant investments and resource commitments to build the right innovation infrastructure as well. The pharma industry will also have to create a large work force which would be capable of nurturing and spearheading a culture of innovation in the sector.

To its credit, recognising the necessity to rework its storyline, Indian Pharma Inc is making a shift from an importer of imitative drugs to an innovator.

New NCEs in the pipeline New NCEs in the pipeline

 

Investment Trends of Life Sciences companies in digital technologies

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But, it wouldn’t be possible without support from the government; ramping up of R&D capabilities, and a very effective intellectual property protection (IPR) framework to facilitate indigenous process development.

Thankfully, there have been some measures in this direction. As Dr Ashwini Kumar, CEO CliniExperts informs, “India is creating and evolving a system for supporting and funding science, technology and innovation (STI). Various government ministries, departments and agencies in public domain, universities and several entities in private domain constitute the ecosystem of STI support and funding in India e.g. BIRAC, Make in India, DRDO etc.”

Similarly, a report released by Assocham in May 2018 highlights that Technology Development Board (TDB) under DST has been providing financial assistance up to 50 per cent of project cost in the form of soft loans. Birac’s i3 is a $ 250 million corpus with$ 125 million from the World Bank and an equal contribution from Government of India. It was created as part of Biopharma Mission to fund biotech start-ups and accelerate innovation in the areas of vaccines, bio-therapeutics and medical devices. The initiative funds companies to advance their assets and other capacity building efforts.

Thus, we are on the path to progress in this arena and if we play our cards right, India can slowly turn into a centre of excellence for the pharma sector and spur the country’s socio-economic growth.

Leveraging Information

Imperatives like improving manufacturing efficiency, resolving supply chain complexities, fulfilling changing consumer demands, ensuring compliance with global regulations and building credible reputations etc. have made it utterly essential to build and analyse data effectively.

Reportedly, pharma companies are utilising the digital technologies like cloud, mobility, and social media to manage in-house costs, enable amalgamation of information and processes across departments and improved profiling of clients.

Thus it is no wonder that a study by Infosys, titled, ‘Digital Outlook: Life Sciences Industry’ reveals that Big Data analytics, followed by cyber security and AI, are the most common digital technologies being utilised by life sciences companies today. It emphasises, “Organisations are mainly placing their bets on technologies that could help them improve existing operations rather than emerging or disruptive technologies. These trends were improving cyber security to protect patient and clinical trial data, using the cloud to improve data and data analytics, and collaborating within the industry to share information and thereby improve patient outcomes.”

The report also lists down the ways in which data or information is augmenting the progress of life sciences companies and the digital technologies aiding the able use of information:

  • Automating pre-work in clinical research by using optical character recognition (OCR), search engines, and AI, complete with a chatbot user interface, for knowledge management
  • Improving safety of drugs by improving data ingestion, data quality, and including data mined from practitioners’ mining literature and social media to augment structured data. Currently there exists a number of challenges – process gaps, lack of visibility, etc. – which the life sciences industry can fix by digitising the flow of intake. Companies can use a benefit risk assessment tool, which uses algorithms. They can also use visualisation and reporting tools to analyse structured and unstructured data and compare the risk benefit profile of a drug with competitive offerings using metrics like Angioedema-Quality of Life (AE-QoL) and adherence, and make informed decisions on how to take the drug forward.
  • Investments in new patient-centric platforms to support clinical trials throughout the life cycle, from patient identification, screening, and recruitment, to eConsent, adherence, and engagement. To facilitate the last two, the platforms leverage clinical, claims, electronic medical records (EMR), electronic patient-reported outcome (ePRO), and behavioural and sensor data along with various algorithms.
  • Using analytics and pattern recognition to support clinical trial participants by detecting disease early and driving value-based care.
  • Improving business process efficiencies of pharma companies by investing in risk based monitoring to predict key events, collaborative automated authoring, automated publishing of clinical trial outcomes to regulators, track and trace systems throughout the distribution process, e-labels, and IoT-led predictive maintenance in pharmaceutical factories.
  • Using technology to achieve greater patient-centricity during clinical trials. This includes a number of measures such as employing wearable devices to remotely track clinical trial patients and digitally integrating electronic medical records to have a single source of truth for health data.
  • Using mobile technology to educate patients about drug safety and effectiveness, gather data, or send reminders about medication.

Therefore, information and its exchange, aided by digitalisation, would be a major game changer in the life sciences industry.

Three Is and their impact

Thus, it is clear that the industry will need to leverage these three Is to resolve its greatest business challenges and move towards its next level o growth.

At the same time, they would also be instrumental in enabling the pharma sector to play a key role in achieving a dream that India had envisioned as a newly liberated nation in 1947. Clearly outlined in our first Prime Minister’s famous speech, ‘Tryst with destiny’. The words were: “The future beckons to us. Whither do we go and what shall be our endeavour? To bring freedom and opportunity to the common man, to the peasants and workers of India; to fight and end poverty and ignorance and disease; to build up a prosperous, democratic and progressive nation, and to create social, economic and political institutions which will ensure justice and fullness of life to every man and woman.

Express Pharma also spoke to a few industry professionals on these three aspects to gain insights from their experience. Check out their views and the strategies they outline to leverage the three Is.

Strategies to spur indigenisation, innovation and information exchange in the pharma industry

Dr Ashwini Kumar, CEO CliniExperts-

Dr Ashwini Kumar Dr Ashwini Kumar

Innovation generally refers to changing processes or creating more effective processes, products and ideas. Innovation is pragmatic in discovering drugs, developing therapeutics and delivering healthcare as per Indian needs. It is only by creating innovation in technology, strategies, practices and policies that Industry can take on global healthcare challenges.

The decade 2010-20 has been declared in India as the Decade of Innovation. We have formulated a science, technology and innovation policy, aimed at an innovation-led development. This policy calls for creating an ecosystem for innovation activity to thrive in our country. It highlights the need to encourage and recognise grass roots innovators.

With a strong R&D base and academic talent, India has the potential to become a leading innovation player in biotechnology and pharma.
India’s contribution to affordable healthcare goes much beyond being a pharmacy of the world. GE’s Research Centre in India has developed a number of low-cost bio-medical equipment from scanners to portable electrocardiograms as has Bristol-Myers Squibb developed a number of promising novel drugs at its partnered research centre in Bangalore. Biocon, on the other hand, has not only developed insulins in India indigenously through a proprietary technology in the early 2000s, but has also developed and delivered two affordable novel biologics for the benefit of cancer and psoriasis patients in India. India is therefore proving its mettle as a “laboratory for the world” that can deliver affordable innovation and a growing number of collaborative efforts are succeeding in delivering products and services that can go a long way in ensuring that the right to healthcare becomes truly universal.

India is a large diversified territory driven by volume consumption as compares to value, and is dependent on in-licensing the technologies. Fostering innovation can also support Make in India initiative, augment employment, support the Start-up India mission etc.

Indu Bhushan, CTO & Director, SteerLife India; Dr Babu Padmanabhan, MD & Chief Knowledge Officer; Dr Himadri Sen, Chairman, Steerlife –

Indu Bhushan Indu Bhushan

People with knowledge combined with the availability of tools, technologies and ingredients are essential part of the innovation ecosystem to foster new drug development leading to improved convenience, compliance, efficacy and safety. Interestingly, there exists great possibility to innovate and address unmet medical needs by unique solutions built on smart strategy of relying on information available from previously approved drugs, essentially with novel approaches leading to improvement in delivery and clinical use. Several regulatory agencies, recognising pressing needs and immense benefits of innovation in healthcare, have made available, well-defined pathways of review, approval and market exclusivity of these hybrid new drug applications. In 2012, Generating Antibiotic Incentives Now (GAIN) was passed as part of US Food and Drug Administration Safety and Innovation act (FDASIA) to address public health threat of antibacterial drug resistance by stimulating the development and approval of new antibacterial and antifungal drugs. The US Food and Drug Administration (FDA) has already approved 12 drug products with Qualified Infectious Disease Product (QIDP) designation, each receiving a priority review apart from granting 147 QIDP designations, including approximately 74 designations for novel drugs in a short span of approximately five years.

Dr Babu Padmanabhan Dr Babu Padmanabhan

It is important to note that in 2017, more than 50% of all NDAs approved have been 505(b)(2) drugs. This percentage is expected to rise to more than 80 per cent over the next few years due to obvious low risk, relatively small program budget, accelerated development and approval and extended market exclusivity. A few examples of such success stories are briefed below:

  • PROCARDIA XL is a zero-order release tablet of Nifedipine that not only reduces dosing frequency from thrice a day to once a day but also significantly improves the efficacy to safety ratio.
  • Cipro XR not only resulted in reduction of dosing from 2/3 times a day to once a day thus improving patient compliance but also extended the usage of the molecule for resistant UTI which otherwise could not be treated with the immediate release tablets.
  • ABSORICA, a semisolid filled hard gelatin capsule formulation of isotretinoin has improved efficacy and patient compliance over soft gelatin capsule formulation of this drug.

Considering the success Indian industry has shown to create copy-cat drug products, the ecosystem is ripe to create hybrid NDAs, which have been sporadic and serendipitous in nature. The time of entry of the innovative new product is very critical to ensure market success. Preferably, such products, need to be introduced well before generic competition to create maximum value. To start off with, a focused and concerted effort by a few players to achieve repeated success would act as an impetus for many more players to join in the path of innovation, growth and sustainable business.

Pushpa Vijayraghavan, Director, Sathguru Management Consultants –

Twenty years after the product patent regime commenced, we still cannot boast of a robust drug discovery engine or a notable level of novel drug pipeline in the country. We have nurtured a solid foundation of generics with revenues north of $35bn and substantial export success. Investment capability is then not the constraint in an industry with an aggregate balance sheet of substantial size. The industry is also not devoid of attempts to engage in NCE research or development. However, success is glaringly elusive. This calls for deeper introspection and policy measures that can trigger sustainable innovation engagement.

Foremost, it is critical to appreciate the risk level and gestation period in discovery and development and resultant reticence in industry investments. While industry is not averse to the idea of investing in higher risk R&D, the level of binary risk has always been an impediment to investments stepping up to an optimal level. With sub-optimal level of investments, the cycle of investment and value realisation is never set in motion. Only when initial investments lead to fruition on commercialisation and monetisation milestones, are additional investments likely to follow.

Here is where extra-mural government funding could play a catalytic role. Government grant funding accessible to ventures has substantially gone up in the last decade and has in fact been a major driver for the current entrepreneurial wave. However, the extra-mural funding allocation of about $150 million has been insufficient for drug discovery ventures given the scattered support to more than 400 ventures and relatively sub-optimal level of programmatic investment per venture. A leaf to pick from the South Korean bio economy that commenced innovation engagement around the same time as India but has surpassed us leaps and bounds with respect to the vigour of its global pipeline. The level of thrust there is notable, with the Korean Drug Development Fund alone being a $2 billion effort.

To nurture an indigenous drug discovery engine, we need to redesign our funding programs for novel drug development and ensure tenor and quantum of foundational support stretches through a while cycle for the initial pipeline. While we do so, it is also critical to take cognisance of weak pipeline of globally benchmarkable translational solutions in domestic institutions.

Combining pragmatism and considerations for sustainability, we should ensure funding for technology access from global sources while simultaneously channelling intra-mural funding in a manner that our institutional backbone can rev up the engine in the decades to come. The India discovered drug shouldn’t be a one-off wonder, we have to make it the order of the day in the future.

Dr Ajit Dangi, President & CEO, Danssen Consulting –

It is no longer necessary to be 100 per cent self-reliant. What is required is a balanced approach without losing country`s sovereignty and identity. Although we have achieved the distinction of being the `Pharmacy of the World`, our over dependence on APIs imported from China is a major geopolitical risk.

Independence with APIs

The blood pressure drug Valsartan, manufactured in China by Zhejiang Huahi Co., contaminated by an impurity NDMA (Nitrosodimethylamine) which has a potential carcinogenic risk and banned in 22 countries including India, is another example of the risk involved in such dependence. Recently, after closing down over 145 API manufacturing facilities in China for non-compliance of environmental laws, there has been shortages of many products in India such as Vitamin C based formulations. At least on critical APIs which are required for essential medicines, India needs to be self-reliant. Indian pharma majors need to look at backward integration at least for their flagship brands and develop a long term business continuity plan. The trade war between China and the US, Brexit in UK are some of the indications of shape of things to come where India can suffer a collateral damage. As in the words of Ruchir Sharma, Chief Global Strategist of Morgan Stanley, one of the major trends in 2018 onwards is ‘De Globalisation’, India needs to be prepared for this mega trend.

Transit from imitation to innovation

While India is proud of being the third largest manufacturer of pharma products in terms of volume in the world, we need to transit from imitation to innovation. The strategy of reverse engineering has paid us rich dividends, time has now come to move up the value chain from cost arbitrage to intellectual arbitrage by using innovation as a platform. For this, we need to foster an ecosystem of strong Intellectual Property protection, human capital of talent with requisite skill set and policy initiatives to incentivise innovation.
Another important issue is of economies of scale and scope and optimum utilisation of capacity. According to IMS report, 95 per cent of our domestic sales revenue of about Rs. 1.2 lakh crores comes from top 150 companies. We have today over 9000 manufacturing pharma companies. Time has now come for consolidation which is also required from the point of view of meeting global quality compliance standards as the manufacturing infrastructure required for this is increasingly becoming sophisticated and expensive.

Invest in digitalisation

As India enters the era of digital economy, the pharma industry needs to invest substantially in newer technologies such as AI, Block Chain, IOT, Track & Trace etc. to improve productivity, efficiency and quality.

Rishad Dadachanji, Director, SCHOTT KAISHA –

Promoting indigenisation

As we have seen, the government of India is promoting the indigenisation of goods and services available in the country through the ‘Made in India campaign.’ This can be used as a key strategy and advantage to help the indigenisation of the Indian pharma industry as well. Today, the pharma industry in India is rapidly growing and so is its dependence on APIs from foreign countries. Even if we look at other industries such as the defence industry, India is the world’s largest importer of defence equipment and is dependent on other countries to fulfil its requirement. Hence, the government has decided to try and boost jobs and FDIs in India through the indigenisation of the defence industry. The Indian pharma industry too can adopt similar strategies either through tech transfers or through the development of high quality sources for key APIs in India itself.

Building an innovative ecosystem

Innovation should not only be looked at from a point of developing new products, but should be used for the improvement or evolution of existing products as well. Temperature sensitive products can be made to resist higher temperatures which leads to better stability in poor or uncontrolled conditions such as transportation. Painful injections can be made to be painless and aseptically filled products can be made to withstand terminal sterilisation to ensure sterility of the product. Such innovation can be advantageous to several existing products, as this finally impacts the end consumers by promoting patient safety. It also creates confidence with doctors which finally results in the product gaining a key position in the market by becoming the preferred choice.

Healthy exchange of information

In India we have a large number of pharma companies working on several products for many years. Each company has generated large amounts of data, based on their scale, relating to their product portfolio. If this data is shared between these companies, each of which have their own area of expertise, there could be several advantages. This healthy exchange of information could strengthen the position of these companies in the Indian market itself, further promoting the indigenisation of the Indian pharma industry.

Girish Arora, Founder & Managing Director, Alniche Lifesciences –

Girish Arora Girish Arora

Indigenisation in the Indian pharma industry is very much supported by the available resources in India i.e. large educated population, scientists’ pool, technologies and initiatives taken by the government to drive the concept.

For instance, 100 per cent Foreign Direct Investment (FDI) is allowed under the automatic route for greenfield pharma and 74 per cent FDI through brownfield pharma under the automatic route. Under the Pharmaceutical Promotion Development Scheme (PPDS), the government extends financial support to conduct seminars, conferences, exhibitions, and mounting delegations to and from India for promotion of exports as well as investments, conducting studies for facilitating growth, exports as well as to discuss on critical issues affecting pharma sector.

Other measures to support indigenisation of the sector include training/knowledge improvement activities on issues relevant to growth of pharma industry; pharma technology upgradation; strengthening of existing infrastructure facilities to make Indian pharma industry a global leader in pharma exports; enhancing the quality, productivity and innovative capabilities of the SME pharma sector in the country; helping industry meet the requirements of standards of environment at a reduced cost through innovative methods of common waste management system etc.

Financial incentives such as market exclusivity, reduced R&D cost including tax credit on R&D cost; R&D grant for Phase I to Phase III clinical trials and the User or Registration Fee Waiver Act for biologicals and orphan drug cases to promote their maximum use in India would also prove to be very beneficial.

Indigenisation in Indian pharma industry will boost the economy and generate huge numbers of employment in the country as well.