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Presentation on theme: "IP AND GLOBALISATION OF INDIAN PHARMACEUTICAL INDUSTRY: EMERGING CONCERNS FOR INNOVATION AND ACCESS Santhosh M.R. Centad 17-18, March 2012 National Law."— Presentation transcript:


2 India: Health/ill-health Profile Problem of double burden of diseases The major communicable diseases (CDs) – infectious and parasitic diseases, – respiratory diseases The major non-communicable diseases (NCDs) – malignant neoplasm, diabetes mellitus, neuropsychiatric disorders, sense organ disorders, cardiovascular diseases, respiratory diseases, digestive diseases, musculo-skeletal diseases, congenital anomalies and oral diseases Besides these we have – maternal conditions, perinatal conditions and nutritional deficiencies. Maternal mortality rate and Infant mortality rate are still high.

3 Health Profile….


5 Health profile …. Srilanka Bangladesh India US

6 Neglected Diseases 1.Malaria- 2.Tuberculosis- 3.Leishmaniasis (Kala Azar)- 93 deaths 4.Lymphatic filariasis 5.Leprosy 6.Dengue 7.Schistosomiasis 8.Onchocerciasis 9.Chagas Disease 10.African trypnosomiasis Trachoma* Meningitis* * MSF

7 Post-1990 policy environment

8 Post -1990: Major Changes IPR regime- TRIPS compliant- Patent act Foreign investment- 100% FDI Import and Export- liberalised Price control- only 74 bulk drugs under DPCO Quality standards – GMP/Schedule M

9 Mixed Responses from commentators Keayla (1994) and Amit Sengupta (1994) cautioned about the possible threats and ramifications of new policy reforms. Sengupta (1999) and Jayashree Watal (2000) argued that there would be sharp increase in the drug prices in India. India may become a centre of global importance in pharmaceutical production and research and thereby, enhance its position in the world economy (Smith 2000:12). a number of Indian firms will successfully weather the transition and come out as more innovative companies. Lanjouw (1997)

10 Major concerns Changing Policy direction Unfettered entry and Exit of Capital Mergers and Acquisitions (M&As) Increasing contract manufacturing Increasing contract research Out- licensing of molecules under development Increasing import- dependence

11 Policy Environment Meager public investment in Health Export- centric- Regulated markets targeted – High Value -Low-volume FDI- centric policies – 100 FDI-automatic route- Self-reliance is no more important concern Local manufacturing is not encouraged – More profitable to import from cheaper destinations such as China

12 Disease Focus of New Chemical Entities based Drug Discovery Pipeline Source: Abrol, Dinesh

13 Share of star researchers involved in communicable and non communicable disease 19912011 Abrol, Dinesh (2011)

14 Year Drugs & Pharmaceuticals Total FDI% Pharma 1991-19952317.7131735.91.8 19962426.9103970.22.3 19971881.5164258.21.1 1998838.4133398.60.6 1999757.3168678.20.4 20002079.9123537.51.7 20014081.8167777.62.4 20022510.5181955.61.4 20032793.3116171.72.4 200415704.2172665.29.1 20055107.3192990.92.6 20069757.3503856.41.9 200711405.7797355.61.4 200811085.913976880.8 20099783.613098200.7 Source : compiled from - SIA News letters and DIPP website Foreign Direct Investment in pharmaceuticals in India (Rs. Million)

15 M&As Target company Acquirer Country of origin Year Amount (USD) Matrix labMylan IncUSAugust 2006$736 mn Dabur PharmaFresenius KabiSingaporeApril 20, 2008$219 mn Ranbaxy Laboratories Limited Daiichi SankyoJapanJune 11, 2008$4.6 bn Shantha BiotechSanofi AventisFranceJuly 27, 2009$783 mn Orchid Chemicals (injectible business) HospiraUS December 16, 2009 $400 mn Piramal Healthcare (domestic formulation) Abbott Laboratories US21 May 2010$ 3.72 bn Paras Pharmaceuticals Reckitt Benckiser Group UK14 December 2010 $ 720.6 Million

16 Select cases of PE in pharma YearCompanyInvestorSize(In $ Mn) Feb 2004Matrix LaboratoriesTemasek74 Feb2004Aurobindo PharmaStanC PE20 Dec2004Glenmark PharmaActis67.7 Mar2005Malladi DrugsIndia Advantage Fund23 Aug 2005Jubilant OrganosysGeneral Atlantic LLC60 Jan2006Unichem LaboratoriesNew Vernon PE13 Mar2006Claris LifesciencesCarlyle Asia20 Nov2006Arch PharmalabsIndia Advantage Fund22 Jun2007Morepen LaboratoriesStanC PE24.4 Sep2007Morepen LaboratoriesAvenue Capital19 Nov2007Unimark RemediesCiti Venture Capital29 Dec2007Cadila HealthcareChrysCapital Investment Advisors14 Dec2007Torrent PharmaGreater Pacific Capital16.61 Jan2008Gland PharmaEvolvence India30 Jun2008Bioplus LifesciencesAIF Capital31 Jul2008Inventia HealthcareNYLIM Jacob Ballas21 Aug2008Nectar LifesciencesCiti Venture Capital23.6 Oct2008Strides ArcolabHSBC Global35 Oct 2009Deccan Health Care Pvt. Ltd.Nexus India Capital Advisors Pvt. Ltd.3.22 Aug 2009 DiagnoSearch Life Sciences Pvt. Ltd JM Financial India Fund7.24 Aug 2009NovaLead Pharma Pvt. LtdKotak Private Equity Group8 Jun 2009Anjan Drugs Pvt. Ltd.Evolvence India Life Sciences Fund5.2 Private Equity Presence in Indian Pharmaceutical Industry Source: compiled from Khan (2011)

17 Exit of PE from Pharma DatePECompanyModeBuyerSize($ Mn) Jul-09StanC PEAurobindo Pharma Open Market Public13.81 Jun-10Greater Pacific CapitalTorrent Pharma Open Market Public49.14 Dec-10Actis, SequoiaParas PharmaceuticalsM&AReckitt Benckiser726 Dec-10Carlyle AsiaClaris LifesciencesIPOPublicNA Oct-10BTS IndiaParabolic DrugsIPOPublicNA Source: Patents-Attract-PE-Interest-in-Pharma-Companies.htm Patents-Attract-PE-Interest-in-Pharma-Companies.htm

18 Select contract manufacturing deals Indian companyMultinationalProduct/comments Lupin LaboratoriesFujisawaCefixime Lupin LaboratoriesCyanamidIntermediates Lupin LaboratoriesApotexCefuroxime Axetil, Lisinopril (Bulk) Nicholas PiramalAllerganBulk and Formulations, APIs for levobunolol and brimonidine Nicholas PiramalAdvanced Medical OpticsEye Products Nicholas PiramalPfizer10 year contract manufacture and supply of hospital products Nicholas PiramalPfizerSeven year contract for R&D services in the animals health division Nicholas PiramalAstra Zeneca 5 year contract potentially $ 350 MM for supply of products as per acquisition of Morepeth Facility Nicholas PiramalGSKMOU for drug intermediates; no fixed tenure WockhardtIvaxNizatidine (anti- ulcerant) Dishman PharmaceuticalsSolvay Pharmaceuticals 6 projects, including supply of starting material and intermediates for Eprosartan Mesylate Dishman PharmaAstra ZenecaIntermediate for esomeprazole Dishman PharmaMerck & CoIntermediate for losartan Dishman PharmaGSKThree intermediates GVKWyeth$ 40 MM FTE contract HikalDegussaManufacturing intermediates and APIs JubilantEil Lilly5 year contract for discovery of NCE in various therapeutic areas IPCA LabsMerckBulk Drugs IPCA LabsTillomedAtenelol OrchidApotexCephalosporin and other injectables Sun PharmaEli LillyCVS products, anti-infective drugs and insulin KopranSynpac PharmaceuticalsPenicillin- G Bulk Drug Cadila HealthcareAltana PharmaTwo intermediates for pantaprazole Cadila HealthcareBoehringer IngelheimGastrointestinal and CVS Products Zydus CadilaEli LillyCardio vascular products BioconBristol Myers SquibbBulk Drugs Source: Compiled from various sources

19 Increasing contract research deals Companies in Contract Research (excluding Clinical Trials) Nicholas Piramal Aurigene (Dr. Reddys) Syngene (Biocon) GVK Biosciences Jubilant Organosys Divis Laboratories Suven Lifesciences Dr. Reddys Laboratories Vimta Labs Clinical Trials Clingene (Biocon) Jubilant Clinsys (Jubilant Organosys) WellQuest (Nicholas Piramal) Synchron Vimta Labs Lambada Siro Clinpharm Relience Life Sciences Asian Clinical Trials (Suven Life Sciences) Source: IDMA (2007)

20 Source: prepared from Government of India (2008), p.67 based on Zinnov Analysis

21 Out-Licensing Deals Indian firmPartnerMolecule/TechnologyDeal valueYear Development phase RanbaxyBayerCipro(NDDS)$65Mn1999NA RanbaxyPPD Inc RBx 10558 (Dyslipidemia) $44 mn2007NA TorrentNovartisAge breaker (Diabetic)$3mn2001development stage Glenmark Forest(for N America) Oglemilast(Asthma/COPD)$190mn2004Phase I Glenmark Tejin (for Japan) GRC 3886 (Asthma/COPD)$53mn2005Phase II GlenmarkMerckGRC3200$247mn2006Phase II GlenmarkEli LillyGRC 6211 (osteoarthritis pain)$135mn2007Phase II Lupin Cornerstone biopharma Anti-infective (NDDS)$10.5mn2007NA Lupinlaboratories Servier IP data on Perindopril$26.7mn2007NA Select Cases of Out-licensing Deals between Indian and Foreign Companies Source: compiled from IBEF Reports on Pharmaceuticals 2008, 2009,

22 Increasing import- dependence Importation of bulk drugs and formulations have gone up Bulk drugs – we have a trade deficit Getting increasingly dependent on China for bulk drugs


24 List of bulk drugs imported from China (APRIL 2011-JUNE 2011) Name of the bulk drugIndication Whether part of essential drug list 2011 1ACARBOSE IPTo treat Type II diabetesNo 2 AMOXICILLIN TRIHYDRATE AND CLAVULANATE POTASSIUM 4:1 IP Anti-bioticYes 3 CEFEPIME DIHYDROCHLORIDE STERILE IP, Anti-bioticNo 4CEFIXIME IP antibiotic used to treat infections caused by bacteria such as pneumonia; bronchitis; gonorrhea; and ear, lung, throat, and urinary tract infections Yes 5 CEFOPERAZONE SODIUM AND SULBACTAM SODIUM STERILE respiratory tract infections (upper and lower), urinary tract infections, skin and soft tissue infections, and bone and joint infections caused by susceptible organisms. It is also used to treat meningitis; peritonitis, cholecystitis, cholangitis, and other intra-abdominal infections; and pelvic inflammatory disease, endometritis, gonorrhoea, and other infections of the genital tract. No 6 CEFOPERAZONE ACID NON STERILE IP used for infections of the respiratory tract, skin, bones, joints, urogenital system, meningitis, and septicemia No 7 CEFTRIAXONE SODIUM NON STERILE IP, AntibioticYes 8 CEFUROXIME SODIUM STERILE IP second-generation cephalosporin antibioticYes 9CIMETIDINE IPtreatment of heartburn and peptic ulcers.No 10CITICOLINE SODIUM CP,Cerebrovascular disorders and head injuryNo 11CLINDAMYCIN PHOSPHATE USP to treat infections with anaerobic bacteria but can also be used to treat some protozoal diseases, such as malaria Yes 12DIPYRIDAMOLE USPBlood thinner (cardio vascular0No 13DOXYCYCLINE HYCLATE IP to treat chronicprostatitis, sinusitis, syphilis, chlamydia, pelvic inflammatory disease Yes 14ENALAPRIL MALEATE IPAnti-hypertensiveYes 15ENOXAPARIN SODIUM IP anticoagulant used to prevent and treat deep vein thrombosis or pulmonary embolism 16 ERYTHROMYCIN IP, Anti-biotic respiratory tract infectionsYes

25 17FAROPENEM SODIUM JPAnti-biotic (sinusitis, pneumonia,bronchitis)No 18FINASTERIDE IP treatment of benign prostatic hyperplasia and hairlossNo 19GLICLAZIDE IPdiabetesNo 20HEPARIN SODIUM IPAnticoagulant (Cardio pulmonary)Yes 21HYDROCORTISONE IP to treat certain forms of arthritis; skin, blood, kidney, eye, thyroid, and intestinal disorders (e.g., colitis); severe allergies; and asthma. Hydrocortisone is also used to treat certain types of cancer. Yes 22 ISOFLURANE PH.EUR used for induction and maintenance of general anesthesia. Yes 23L-PROLINE,Dietary supplementNo 24INOSINEDietary supplementNo 25 MEROPENEM BUFFERED STERILE IP broad spectrum injectable antibiotic used to treat a wide variety of infections, including meningitis and pneumonia No 26MIFEPRISTONE CPabortifacient Yes 27PACLITAXEL IPCancer chemotherapyYes 28PARACETAMOL IPAnti-pyreticYes 29 PREDNISOLONE ACETATE USP, corticosteroid drug with predominant glucocorticoid and low mineralocorticoid activity, making it useful for the treatment of a wide range of inflammatory and auto-immune conditions Yes 30 RANITDINE HYDROCHLORIDE IP AntacidYes 31ROXITHROMYCIN IP antibiotic. used to treat respiratory tract, urinary and soft tissue infections No 32TICARCILLIN SODIUM & POTASSIUM CLAVULANATE (30:1) POWDER treatment of bacterial septicemia, skin and skin structure infections, lower respiratory tract infections, bone and joint infections, GU and gynecologic infections, and intra-abdominal infections caused by susceptible strains of bacteria. No Source: WWW.DEPARTMENTOFPHARMA.GOV.INWWW.DEPARTMENTOFPHARMA.GOV.IN

26 Concluding Remarks There is no enabling policy environment for domestic industries Pharma R&D is not oriented to the epidemiological needs of the country Government should invest more in health and pharma research Public sector research should be promoted Unfettered movement of capital should be controlled Should not allow brownfield investments Bulk drug industry should be promoted.


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