The Indian pharmaceutical industry: a time of growth and change (part 1)

Rebecca Aris interviews Tapan Ray

Organisation of Pharmaceutical Producers of India

The pharma industry in India continues to grow rapidly and as it does the regulatory environment continues to shift.

With over thirty years experience in pharma Tapan Ray has a broad overview of how Indian pharma currently looks, compared with other parts of the world, and how it is set to evolve. In a written interview Tapan shares his thoughts with us.

Interview summary

RA: Could you please start by telling me about your background and your current role?

TR: I have over thirty years of national and international experience in the Pharmaceutical and Healthcare Industry based in India and the U.K. I currently hold the position of Director General of the Organisation of Pharmaceutical Producers of India (OPPI).

In the past I have held various senior positions, such as International Marketing Strategy Manager, Glaxo plc. U.K., Director in the Board of Glaxo India Ltd, Non-Executive Director of Biddle Sawyer India Ltd., Managing Director of Abbott Laboratories India Ltd., Managing Director of Kopran Limited, India, CEO and Director of Sami Labs. Ltd., India, Chairman of the Board of Shasun Pharma Solutions Ltd., Northumberland, England, U.K. and Non-Executive Director in the Board of Shasun Chemicals and Drugs Ltd.

In my current role I:-

• Facilitate greater access to quality healthcare solutions.

• Help foster research and innovation in the country.

• Disseminate Industry knowledge and share best practices.

• Contribute meaningfully in policy dialogues with government and other stakeholders.

RA: What do you think the implications would be of restrictions to the FDI policy in pharma?

TR: India witnessed the second highest growth in FDI inflows in the world during 2011, which helped generate over two lakh (lakh = one hundred thousand) jobs, reflecting robust faith of international investors in Indian economy and allaying fears of its fading global sheen. Although, some international companies have expressed concern over stalled decision-making in the Indian bureaucracy, the majority has expressed intent to expand operations within the country during 2012.1

“…71% expressed their keenness to invest in India in the short run while 16% are reluctant to invest… “

“Investors perceive that India presents value and promising growth dynamics in this increasingly unstable global economy”. The report cited potential of the home market, cost competitiveness and qualified workforce as the factors driving FDI into India.

The total value of FDI inflows during Jan-Nov 2011 rose 13% YoY to over US$ 50 billion. According to E&amp,Y India attractiveness survey, 71% expressed their keenness to invest in India in the short run while 16% are reluctant to invest as the prospect makes them nervous and frustrated.

The implications of restrictions to the FDI policy in pharma are as follows:-

• It is good for the country that 100% FDI in the pharmaceutical sector has remained unaltered. Otherwise a large amount of foreign investments for pharmaceuticals would have gone to other countries.

• Both ‘Greenfield’ / ‘Brownfield’ investments, as well as joint ventures contribute to creation of high-value jobs and also ensure access to high-tech equipment and capital goods.

• Technology cooperation with global pharmaceutical companies not only stimulates growth in manufacturing, R&amp,D spaces of the country, but also positively impacts patients’ health with increased access to innovative medicines and vaccines.

• A stimulus to Pharmaceutical R&amp,D with global collaborations could help establishing a strong research-based pharmaceutical industry in India capable of developing innovative medicines for the world. Any restriction to FDI in the pharmaceutical sector could make overseas investment even in the R&amp,D sector of India less inviting.

• Indian generic pharmaceutical industry is among the top ten producers of bulk medicines in the world,2 manufacturing 8% of the world’s medicines.3 Foreign investors look to India for their renowned efficiency and expertise in manufacturing in order to expand globally. Through improved access to foreign markets, FDI can lead to increased domestic exports.

• Currently, there is a strong global competition to attract more and more foreign investments. All these countries recognize that global pharmaceutical companies bring high-paying jobs, technology know-how, and significant economic spill-over effects. In the United States, each job in the research-based pharmaceutical industry supports 3.7 additional jobs.4

• Finally, 100% FDI through automatic route is a decision of early 2000. Any retrograde steps will send a wrong signal about the predictability of Indian financial / fiscal policies to the global investors, especially when the country has strong safeguards in place against any anti-competitive fall outs of M&amp,As in form of strong scrutiny Competition Commission of India and careful price monitoring by the National Pharmaceutical Pricing Authority (NPPA).

RA: What you think is the biggest challenge to gaining regulatory approval in India?

TR: Presently, India lacks a centralized regulatory body and has a bifurcated drug regulatory system wherein the regulatory functions are divided between the Central and State bodies. As a result, regulatory uniformity in the country between the states for all approval process is grossly lacking.

Moreover, the key impediment faced by the regulatory system is the inadequate skilled manpower to ensure effective monitoring and compliance, necessary to control the quality of drugs reaching the market.

Though GMP inspection has been made mandatory, the implementation is thwarted due to lack of trained inspectors.

As a result the industry is also struggling with following regulatory issues:

• Delay in “New Drug Approval” process and site registration

• Data Protection to avoid patent infringement

• Pharmacovigilance Program

• Delay in Clinical Trial Approval Process

RA: What do you consider to be the biggest challenge to innovation in pharma in India?

TR: At present, largely due to the efforts of the Government of India, exerted systematically over the past few decades, India has emerged as a major supplier of low-cost pharmaceutical products around the world.

“India has emerged as a major supplier of low-cost pharmaceutical products around the world.”

The research-based pharmaceutical and biopharmaceutical industry is a key sector for India’s future economic growth. It also fuels the growth of the generic pharmaceutical industry as the innovative products go off-patent.

The following innovation friendly steps need to be taken for establishing India as a front runner within the global scientific and research community:-

1) Create a robust administrative mechanism for IPR enforcement to build stakeholder confidence:

Such an administrative mechanism should effectively prevent the entry of unauthorized generic copies of patented molecules in the Indian market during the patent life of the innovator’s molecule. A strong IP regime is a critical success factor in building a vibrant innovative pharmaceutical industry, in the globalized economy.

2) Need for suitable execution at the judiciary level:

A strong IP friendly ecosystem is critical to create a sustainable, vibrant and innovative pharmaceutical industry in the country. While dealing with the patent infringement cases, merits of the patent must be given prime importance than any other factors, establishing ‘fast track courts’ for the same.

3) Capacity building and developing a sustainable IP program

Although judicial fairness and integrity are well recognized in the country, there exists a knowledge gap within the legal community in the technical intricacies of IPR in general and product patents in particular, both being complex areas. Judicial enforcement in IP cases should never be allowed to be sub-optimal and courts should not take years to settle patent disputes, IPR disputes must be put on a fast track and the penalty for the violation of patents should be exemplary and be allowed to act as a meaningful deterrent. It is worth mentioning that not a single patent related case has been resolved in India even after so many years.

4) Incremental Innovation

Section 3(d) of the Indian Patents (Amendment) Act, 2005, includes restrictions on patentability for new form of substances and on incremental inventions ‘unless they differ significantly in properties with regard to efficacy.”

Recent patent rejections emanating from the four Patent Offices demonstrate that the term “efficacy” is being construed in a ‘drug regulatory’ sense, which normally only drug regulators are qualified to judge, not patent examiners. As a result, we see varying standards used by examiners and courts in judging patent applications.

Further, patent applicants are finding it difficult to satisfy efficacy requirements at the stage of filing and prosecution of patent applications, as these are usually filed years earlier, when the innovation is actually established. It is five to ten years later in the development cycle, after considerable expense, that sufficient efficacy and safety data are generated during clinical trials. To satisfy those requirements, applicants would need to wait to file their patent applications, years after making the same applications in other countries, leaving them quite vulnerable to intellectual theft.

Till such time Section 3(d) is suitably amended, the Patent Office Manual should provide clear and transparent guidelines to ensure a broader and appropriate interpretation of ‘efficacy’ standards and include “safety” and “serious side effects” profile as other dimensions of innovation. Incremental safety and improved side-effect profile are very significant for the wellbeing of patients and should be made patentable in India.

Need for Regulatory Data Protection (RDP):

After the grant of a patent to a new chemical entity, enormous amount of clinical data will need to be generated over a period of 8 to 10 years for the regulatory authority to give marketing approval for the product. Such clinical data generation and the product evaluation processes are not only very expensive, but also time consuming and risky. The voluminous clinical and scientific data thus generated would have otherwise remained as an intellectual property under ‘trade secret’ with the innovator, if there was no need to share this information with the regulator of the country.

Thus innovators’ clinical data must be protected against both disclosure of the dossier and unfair commercial use of the data by the generic players, for a specific period of time. Without meaningful protection of commercially important data, Indian innovative companies and their investors will also not have adequate incentives to develop and commercialize new medicines, particularly those medicines, which are needed most by the a large number of Indian population.

“It is worth mentioning that not a single patent related case has been resolved in India…”

There is now a tremendous opportunity to showcase India’s strength as a nation partnering with other countries in pursuit of scientific discoveries. This opportunity would not only help in keeping our scientific talents within the country but also bring in significant foreign direct investment transforming India as a global outsourcing hub for clinical development of new molecules, the position currently enjoyed by China, with its RDP system already in place. Besides China, there are large numbers of countries in the world which have a functional RDP system in place.

Part 2 of this article can be viewed here

References

1. E&amp,Y attractiveness survey http://www.ey.com/Publication/vwLUAssets/India_attractiveness_survey_2011/$FILE/India_attractiveness_survey_2011.pdf

2. http://www.indembassy.be/industry_and_services.html

3. IHS Global Insight, Country Profile: India: Pharmaceutical Market, March 11, 2011.

4. Archstone Consulting, LLC, The Biopharmaceutical Sector’s Impact on the U.S. Economy: Analysis at the National, State, and Local Levels” March 2009.

About the author:

Tapan Ray is the Director General of the Organisation of Pharmaceutical Producers of India (OPPI).

Mr. Ray has over 30 years experience in the Pharmaceutical &amp, Life Science Industry and has held various senior positions in India and abroad like Global Commercial Strategy Manager, Glaxo plc., U.K., Director in the Board of Glaxo India Limited and Managing Director, Abbott Laboratories India Limited. He was also the President of OPPI.

Mr. Ray is a Member of the Council of International Federation of Pharmaceutical Manufacturers &amp, Associations (IFPMA), Geneva, Switzerland and also represents various Committees of the Government and Industry Associations like, Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII). He is also a Member of the Governing Board of Institute of Intellectual Property Studies (IIPS) and is a visiting faculty in India’s top Management Institutes.

Mr. Ray holds a B.Sc. (Honors) and a Masters Degree in Geology from the University of Calcutta and was a National Scholar. He was trained at the Indian Institute of Management (IIM), Ahmedabad.

What you think is the biggest challenge to gaining regulatory approval in India?