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1 INDIA-CIS PHARMA & HEALTH CONFERENCE MUMBAI 3 rd MARCH, 2006 Department of Chemicals & Petrochemicals Ministry of Chemicals & Fertilizers Government.

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Presentation on theme: "1 INDIA-CIS PHARMA & HEALTH CONFERENCE MUMBAI 3 rd MARCH, 2006 Department of Chemicals & Petrochemicals Ministry of Chemicals & Fertilizers Government."— Presentation transcript:

1 1 INDIA-CIS PHARMA & HEALTH CONFERENCE MUMBAI 3 rd MARCH, 2006 Department of Chemicals & Petrochemicals Ministry of Chemicals & Fertilizers Government of India

2 2Agenda  India – Overview of the Country  Indian Pharmaceutical Industry  India’s Strengths in Pharma Sector  Status of Pharma Exports to CIS

3 3 India – Overview of the Country

4 4 India – Largest democracy in the world  Gained independence in 1947  Current population over 1 billion  English is the language of business  4 th largest economy globally on PPP basis  6 th largest energy consumer  Predicted by Goldman Sachs to be the 3 rd largest economy in the world by 2050

5 5 India finds harmony – Even with all its diversity  29 states & 6 UTs with 22 official languages  3.3 million square kilometers area  Religions: 81% Hindus, 12% Muslims, remaining are Christians, Sikhs, Jains, Buddhists, Parsis, Jews  Per capita income ~US$ 750  GDP ~ US$ 650 billion

6 6 INDIA RISING  GDP growth rate – 8.1% (twice that of USA & UK)  Manufacturing sector growth rate – 9.4%  Exports growth rate – 23 ( compounded growth rate over last 10 years)  Inflation Rate % (5% a year ago)  Credit growth- ~25% (22% last year)  Foreign Exchange Reserve - US $ 142 billion (1991-US $ 5.8 billion) Some Indicators

7 7 Capital Market  Equity Index at the highest level ever close to (BSE)  India’s market capitalisation US$ 550 billion  Registered FIIs – 667  This Year’s flow of portfolio investment- US $ 10 billion  Volume of public issues rose by 5 times in 2005  Introduction of book-building process

8 8 RECENT FISCAL REFORMS  Income Tax simplified - 10%, 20% and 30% rates  Corporate Tax rate - Reduced to 30% from 35%  Peak Import Duty on non-agricultural items reduced from 15 to 12.5 %  Import duty on specified Capital Goods (including those for Pharma & biotech. Sector) - 5%  Import duty on IT items (217) – Nil  State Value Added Tax - introduced w.e.f. 1st April 2005 (4% rate for pharma)

9 9 Some of the world’s best academic and healthcare institutes are in India  14,000 hospitals  700,000 hospital beds (85% urban)  More than 500,000 doctors  737,000 nurses  171 medical colleges  17,000 medical graduates/year (MBBS/MD)  300 life sciences colleges produce over 700,000 graduates annually

10 10 Indian Pharmaceutical Industry

11 11 Indian Pharma Industry Profile  Number of companies  Large : 300  SMEs : 6000  According to Mckinsey & Co., Indian pharma market to be US$ 25 billion by 2010, out of which US$ 11 billion to be domestic sales  PHARMEXCIL formed to facilitate exports of pharmaceuticals and related matters- plan to set up warehouse facility in Russia

12 12  Worth US$ 8 billion ; globally # 4 in volume, # 13 in value  Exports of US$ 3.7 billion in FY 2004, 22.9% CAGR years.  India among top-5 bulk manufacturers and top-20 exporters world-wide  India now files highest number of DMF’s  India has largest number of US FDA approved plants outside US.( 75 now)  US Pharmacoepia INDIA office opened at Hyderabad - first such office ouside USA  Domestic market growing at 8-10% p.a.  R&D spending to increase from 5% of sales to 8% by 2007 Indian Pharma Industry Profile contd.

13 13 India: The Pharma Outsourcing Hub  India – emerging as the hub for  Collaborative & contract research  Contract manufacturing  Co-development  Co-marketing  Cost of developing an NCE – over US$ 1 billion whereas, in India it can be as less as US$ 50 million  Several MNCs like Pfizer, Merck, GSK, Roche, Bayer, Aventis, etc. making India a hub for APIs and bulk supplies  Pfizer, Eli Lilly, Novartis carrying out clinical trials in India

14 14  Several CROs (about 22) like Quintiles, Simbee, RCC, Omnicare, etc. set up liaison/marketing offices in India  Indian CROs commenced trials since 1996  Cos. like GSK Biological lined up global trial of 4 vaccines in India during Also clinical R&D for AIDS, dengue, malaria, TB vaccines India: The Pharma Outsourcing Hub contd.

15 15 Regulatory Framework  Drugs and Cosmetics Act, 1940 – a Central Act to regulate manufacture/ import/sale of drugs  New drugs, imports, clinical trials, drug standards approved by Central Govt. Enforcement by States  Drug (Price Control) Order, 1995 – for control of prices of specified drugs  Indian Patents Act, 1970 – As on 1 st January, 2005 provides product patent for drugs, food and agro-chemicals

16 16 Some Recent Changes in Drugs & Cosmetics Act and Rules  Schedule “Y” amended for multi-centric concurrent clinical trials as per GCP  GMP – realigned as per international guidelines (particularly WHO & OECD)  GCP – India’s requirements on GCP published as guidelines  GLP – monitoring authority set up for pre- clinical (toxicological) studies  Registration system streamlined for import of drugs – both site and product registration

17 17 Process Patents for pharmaceuticals introduced in 1970  Prior to 1970  85% market with foreign companies  15% market with domestic companies  1970 – Process Patent introduced for pharmaceuticals  At present  85% market with domestic companies  15% market with foreign companies

18 18 India’s Strengths in Pharma Sector

19 19 Indian Pharma Industry: Strengths - Policies  Product Patent regime in effect from January 1, 2005  Pro-business, Pro-IP Government – federal, state & city  India bio/pharma clusters make it easy to set-up and conduct business  Effective Check on spurious drugs- new law being made

20 20  Rich bio-diversity  Well-developed pharmaceutical, chemical & healthcare industries  Complex capabilities in research, synthesis & manufacturing  Quality conscious (cGMP, GLP, ISO)  CSIR= World renowned 42 national research laboratories  Huge patient population  Information technology = core competence Indian Pharma Industry: Strengths - Infrastructure

21 21  Cheaper labour (cost to hire a Ph.D. scientist = US$ 25K; as against US$ 65K/year in the US)  Employers receive loyalty, respect, dedication & admiration from employees  40% cheaper to set up a plant in India than in the US/EU  35-40% cost savings for conducting clinical trials in India  Funds available for expansion and start-ups Indian Pharma Industry: Strengths - Cost

22 22  Huge pool of experienced scientific manpower – fluent in English  Employees work 6 days/week & are willing to work in all shifts  Reverse brain-drain : Non-resident Indian scientific personnel moving back  New breed of managers (no longer family-run businesses  Strong entrepreneural nature = Competition Indian Pharma Industry: Strengths - Talent

23 23 India is a proven source of quality and cost-effective pharma materials  Fine chemicals  Intermediates  Advanced intermediates  APIs (Active Pharmaceutical Ingredients)  Formulations

24 24 Highest number of US FDA approved Plants outside the US are in India Source:FDA & Proximare

25 25 Indians filed the highest number of DMFs : 871% growth since 1987 Source:FDA & Proximare

26 26 Status of Pharma Exports to CIS COUNTRIES

27 27 Exports of Drugs, Pharmaceuticals, and Fine Chemicals Major Destinations in CIS Country ($ million) Share of Dosage Forms (%) Russia Ukraine Kazakistan Azerbijan2998 Uzbekistan4689 Belarus4689 Turkmenistan2389 Kyrgystan13100 Georgia1294 Tazikistan1191 All figures rounded of 1$ = Rupees 44

28 28 India – world’s supplier of ARV drugs (Anti- HIV/AIDS)  About 50% of the ARV drugs being exported to developing countries from India – substantial exports to Africa  Indian companies instrumental in drastic reduction in ARV drug prices from over US$ 10,000 per head/annum to US$ 150 per head/annum

29 29 CIS PHARMA MARKET ( INCLUDING RUSSIA)  US$ 7 billion - Share of Indian exports only 3 to 4% (aroud $ 275 million) - Great scope to enhance exports from India  India can help CIS to meet their health care needs in a cost effective manner and cater to larger section of population  Joint Ventures possible provided certain issues like convertibility to dollar mode are sorted out in some countries  Fast track registeration for Indian medicines would be helpful

30 30 Areas for India-CIS collaboration  Sourcing of APIs & formulations from India  Collaborations for manufacturing & marketing of drugs-Indian companies are very strong in all therapeutic groups especially in diabetic, respiratory, neuro, antiinfective and cardiovascular groups and they can meet the requirements of CIS countries in a cost effective manner  Joint R&D work for pharmaceuticals  Training of drug regulators at NIPER  Cooperation for use of various testing facilities at NIPER with respect to quality control/quality assurance, bio-availability, impurity profiling,toxicology etc.  Participation in INDIACHEM 2006 in Mumbai from 8-10 November, 2006

31 31 The Indian Government and Industry would welcome partnerships with CIS countries in providing access to affordable, quality medicines Conclusion

32 32 Thank You !


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