This year’s CPhI Annual Report released a ranking of countries as pharmaceutical destinations on various parameters. The rankings of the CPhI Pharma Reputation League Table attempts to chart the reputational strengths and perceived weaknesses of the 10 main pharma economies based on the insight of 500 international pharma companies from over 40 countries. The rankings show some interesting results.
While the US unexpectedly tops the chart, India and China are are the bottom of the table in terms of overall reputation rank. But when it comes to ranking of countries according to their predicted pharma market growth, China, followed by India top the chart, with the US in third position. If we go by these rankings, demographics could negate perceived reputational weaknesses, at least in the case of India and China.
Germany tops in their quality of pharma API manufacture and finished product manufacturing, but India and China once again fall to the last two ranks on both these parameters. In the same vein, Germany topped and India and China brought up the rear when it came to transparency index, regulation robustness and corruptness.
India was ranked seventh on innovativeness within each country’s pharma industry, with the US on top and China at the bottom of this ranking. When it came to overall competitiveness of each country, India was once again ahead of China, but only by a whisker, bagging the third position while the latter came a close fourth. The quality and knowledge of India’s pharma professionals is ranked seventh to China’s tenth position.
The key takeaway message from these scores is that potential to grow is a prediction not fact. And India will need to work on quality concerns, even if they are perceptions, to turn growth potential into reality. In spite of India’s rather poor scores on these rankings, the growth potential of the country as a pharma market, as with China, comes through without a doubt. The size of the population which overseas innovator pharma companies saw as a huge market opportunity, is in fact, today being perceived as a threat to profits. As Dilip G Shah, CEO, Vision Consulting Group, one of the contributing experts to the 5th edition of the CPhI Annual Report, explains the tide is now gradually turning in favour of generic companies thanks to pressure from patients on governments to act.
He predicts that the intense battle between innovators and biogeneric companies will rage on with innovators blocking biogenerics through morally dubious means. Innovator companies will face increasing pressure to allow development of the biogeneric version to ensure access to medicines at affordable prices. The regulators and the governments will take on the innovators and force them to facilitate development of biogeneric versions. He alludes to the US FDA FDA Commissioner Dr Scott Gottlieb’s statement on a CNBC programme that while the FDA doesn’t play a role in drug pricing, “we do affect drug competition in terms of getting new drugs on to the market, and create competition to older drugs, particularly with generic drugs”. Shah sees this as evidence that both the drug regulator and the competition authorities (in this case the US FDA and the US Federal Trade Commission (FTC)) will be on the same side and this will in time encourage biogeneric companies to be more aggressive than they have been so far.
While this could be the future, the present finds the Indian and US governments once again pitted against each other to protect the interests of their consumers and corporates. As the National Pharmaceutical Pricing Authority (NPPA) expands price caps from stents to knee implants, US-based medical device companies, through the Advanced Medical Technology Association (AdvaMed), have asked the US Trade Representative (US TR) to step in and withdraw India’s benefits under the Generalized System of Preferences (GSP).
So both governments find themselves, once again, striving to balance political strategy with economic imperatives. Both governments will have to work hard to find a middle path, without giving in to posturing by companies on both sides of the fence. The fact of the matter is that patients, be they Indian, American or of any nationality, deserve high quality affordable medicines and medical devices accessible to all strata of society. Can both governments work to create the right incentives to reward companies who deliver on this promise? Having a huge demographic dividend is a natural advantage, but it would not take many years before it turns into a disaster.