Вы находитесь на странице: 1из 12

Policy of GOI on Drugs & Pharmaceuticals Industry

Topics 1. Introduction 2. Incentives 3. Exports 4. Classification 5. Marketing Authorization 6. Drugs & Cosmetics Act, 1940 7. Drug Policy, 1986 8. Drugs Price Control Order, 1995 9. National Pharmaceutical Pricing Authority 10. National Pharmaceutical Policy, 2002 11. Draft National Pharmaceutical Policy, 2006 12. Patent 13. Draft National Pharmaceutical Pricing Policy 2011 14. Trade Names 15. Pricing 16. Restrictions Concerning Imports 17. Intellectual Property Rights 18. Foods Standard and Safety Act, 2006 19. Recent Developments 20. Drug Scenario 21.Clinical Research 22. Conclusion 23. Reference Page 1 1 2 2 2 2 3 3 4 4 4 5 5 6 6 7 8 8 8 9 9 10

Policy of GOI on Drugs & Pharmaceuticals Industry INTRODUCTION The Indian pharmaceutical industry in recent years has grown in stature from an industry that copies patent drugs and manufactures them cheaply. Its now counted among the industries that are fueling Indias economic growth and holds vast potential. India-based pharmaceutical companies are also predicted to gain considerable market share in the world by the end of this decade. The industry is estimated to have generated revenue worth US$13.1 billion in FY 2011, according to a new Research and Markets report, Indian Pharma Sector Forecast 2014. For the country, pharmaceutical industry has always been a prominent industrial sector. A Brief Report Pharmaceutical Industry in India, published in January 2011, said that Indian pharmaceutical industry is a highly organized sector, and it ranks very high amongst all the third world countries in terms of technology, quality, and the vast range of range of medicines that are manufactured. The industry is expected go through major transformation in the next ten years and enter the global top tier. Currently, its estimated to be worth US$4.5 billion, and is growing at nearly 8 to 9 percent annually. Last year, McKinsey & Companys report, India Pharma 2020: Propelling access and acceptance, realizing true potential, predicted that the Indian pharmaceuticals market will grow to US$55 billion in 2020; and if aggressive growth strategies are implemented, it has further potential to reach US$70 billion by 2020. Market Research firm Cygnus report, published last year in December, forecast that the Indian bulk drug industry will expand at an annual growth rate of 21 percent to reach $16.91 billion by 2014. The report also noted that India ranks third in terms of volume among the top 15 drug manufacturing countries. The exports are expected to increase by 20 percent in 2011, taking the overall value to 6.73 billion. Research and Market report noted that around 56 percent majority of products exported are formulations, while bulk drugs account for a little over 40 percent and herbals for the remaining two percent. INCENTIVES Additionally, the government of India is also providing incentives to encourage investment in pharmaceutical sector and helping domestic players. Under the automatic route in the drugs and pharmaceuticals sector including the companies using recombinant technology the government has permitted 100 percent foreign direct investment (FDI). According to a report, the Indian government plans to set-up a US$639.56 million venture capital (VC) fund. This fund is expected to encourage discovery of new drugs and also help strengthen the pharma infrastructure. The Government has also issued Expression of Interest that says that they intend to facilitate establishing new and also upgrade GLP Compliant Chemical Testing Laboratories; Compliant Biological Testing Laboratories; and GLP Compliant Large Animal Houses. The Government plans to carry out these initiatives via Public Private Partnership (PPP). Through these initiatives the Department of Pharmaceuticals expects to facilitate innovation and catalyze and compliment the R&D efforts of the Indian Pharma Industry. The Department of Pharmaceuticals has prepared a Pharma Vision 2020 that aims to make India one of the leading destinations for end-to-end drug discovery and innovation. It plans to provide world class infrastructure, internationally scientific manpower for pharma R&D, venture fund for research in the public and private domain and more. The Drugs and Pharamceuticals Manufactures Association has also received an inprinciple approval for its proposal to set-up special economic zone (SEZ) for pharmaceuticals, bulk drugs, active pharmaceutical ingredients (APSs), and formulations. The zone will be located at Nakkaplli mandal (Vishakapatnam district), in the state of Andhra Pradesh. It also proposes to set up a National Centre for R&D in bulk drugs at
Page | 1

Policy of GOI on Drugs & Pharmaceuticals Industry National Institute of Pharmaceuticals Education and Research (NIPER), Hyderabad and a National Centre for Medical Devices at NIPER, Ahmedabad. EXPORTS India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs), Bio-Pharmaceuticals, Clinical Services to various parts of the world. Export of Drugs and pharmaceuticals from 2007-08 to 2009-10 are given below: Exports Growth Year (US$ billion) (in percent) 6.3 14.4 2007-08 8.6 35.7 2008-09 9.1 5.9 2009-10
Source: Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

CLASSIFICATION In India, the import, manufacture, distribution and sale of drugs and pharmaceuticals are regulated by the Drugs and Cosmetics Act, 1940 (DCA), the Drugs and Cosmetics Rules, 1945 (DCR), Drug Policy 1986, Modifications in Drug Policy 1986, Durgs (Prices Control) Order 1995 and Pharmaceutical Policy 2002. MARKETING AUTHORISATION The major legislation for pharmaceutical regulation is the Drugs and Cosmetics Act, 1940 (DCA) and its subordinate legislation, the Drugs and Cosmetics Rules,1945 (DCR)1. Drug (Prices Control) Order, 1995, Drugs (Magic Remedies) Objectionable Advertisement Act, 1954 and Pharmacy Act,1948 are other regulations which have a bearing on the pharmaceutical business in India. The legislations apply to the whole of India and to all categories of medicines (e.g., allopathic, ayurvedic, siddha, unani and homeopathy.), whether imported or manufactured in India. The legislation is regulated by the Central Government (Ministry of Health & Family Welfare) in New Delhi, which is responsible for its overall supervision and enforced by State Government through its Food and Drug Administration (FDA). The office of the Drugs Controller General of India (DCGI) has the primary responsibility for approving new drugs, molecules and standards, Vaccines & Sera, new usage and claims, new method of administration, clinical research and trials, introductions of a new unique formulation and granting import and export licenses. It oversees the activities of the Central Drugs Standard Control Organization (CDSCO). The DCGI also exercises control over medical devices imported or manufactured in India. However, power to provide manufacturing and selling licences - which are the two main stages required to manufacture and sell a drug - belongs to each individual State Government through its Food and Drug Administration (FDA). These Food and Drug Administrations (FDAs) also carry out enforcement of the DCA and the DCR. DRUGS AND COSMETICS ACT, 1940 The Drugs and Cosmetics Act, 1940 is the first Act which came into existence in the area of drugs and pharmaceuticals. This was an Act to regulate the, manufacture, distribution and sale of Drugs and Cosmetics in the country. The main object of the act is to prevent substandard in Drugs & Cosmetics. To ensure the quality of drugs manufactured and sold in the state, drug samples are taken from manufacturing units, hospitals and sales outlets and their quality is assessed after conducting test/analysis in the Drugs Testing Laboratory of the Drugs Control Administration.
Page | 2

Policy of GOI on Drugs & Pharmaceuticals Industry During the last century, the Drug Industry was practically non-existent in India and pharmaceuticals were being import from abroad. During and after the First World War, a number of Indian and Foreign companies start manufacturing pharmaceuticals at cheaper rates to compete with imported products. The Government was not happy with the quality of drugs produced. A Drugs Enquiry Committee was set up in 1931 with an aim to enquire into the whole matter of drug production, distribution and sale by inviting opinions and meeting concerned people. The Drug Act was passed in 1940 taking the recommendations of the committee. The main objective was to regulate the import, manufacture, distribution and sale of drugs. Under the provisions of this Act, the Central Government appoints the Central Drug Authority, Central Drug Laboratory, Drug Consultative Committees. DRUG POLICY 1986 Drug Policy of 1986, titled "Measures for Rationalisation, Quality Control and Growth of Drugs & Pharmaceuticals industry in India" under late Shri Rajiv Gandhi. This Policy was modified in 1994. The main objectives of the policy include: Providing abundant quantity, at reasonable prices of essential and life saving and medicines of good quality. Strengthening the quality control system over drugs and medicines production and promoting the rational use of drugs in the country. Creating an environment friendly to channelize new investment with an objective to boost cost-effective production with economic sizes and introducing new technologies and new drugs. Strengthening the indigenous capability for production of drugs. Providing abundant quantity, at reasonable prices of essential and life saving and medicines of good quality. Strengthening the quality control system over drugs and medicines production and promoting the rational use of drugs in the country. Creating an environment friendly to channelize new investment with an objective to boost cost-effective production with economic sizes and introducing new technologies and new drugs. DRUGS PRICE CONTROL ORDER (DPCO), 1995 DPCO was first passed in 1970 and was revised in 1979, 1987 and 1995. The Drugs Price Control Order (DPCO), 1995 is an order issued by the Government of India under Section 3 of the Essential Commodities Act, 1955 to regulate the prices of drugs. It provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Government and penalties for contravention of provisions among other things. Drugs and formulations have been subjected to price control for more than three decades now. To review drug price control mechanism Drugs Price Control Review Committee (DPCRC) was set up in 1999. The essential features of DPCO covers the following questions:

How are the prices of drugs and medicines in the controlled category regulated? There are two prices for this fixed by the NPPA as per the provisions of DPCOCeiling and Non Ceiling Price . Ceiling Price is the single maximum selling price fixed that is applicable throughout the country in the case of each bulk drug, which is under price control. Non-Ceiling Price fixed by NPPA are specific to a particular pack size of scheduled formulation of a particular company.
Page | 3

Policy of GOI on Drugs & Pharmaceuticals Industry Whether NPPA has any role to regulate prices of non-scheduled drugs (drugs not under direct price control)? What margins are allowed to a Wholesaler and a Retailer as per DPCO, 1995

NATIONAL PHARMACEUTICAL PRICING AUTHORITY (NPPA) The NPPA was established on 29th August 1997 as an independent body of experts following the Cabinet Committees decision in September 1994 while reviewing the Drug Policy. The Authority, has been entrusted with the task of fixation/revision of prices of pharmaceutical products (bulk drugs and formulations), enforcement of provisions of the Drugs (Prices Control) Order and monitoring the prices of controlled and decontrolled drugs in the country For the purpose of implementing provisions of DPCO, powers of the Government have been vested in the National Pharmaceutical Pricing Authority (NPPA). NATIONAL PAHARMACEUTICAL POLICY 2002 The process of liberalization set in motion in 1991, has considerably reduced the scope of industrial licensing and demolished many non-tariff barriers to imports. The impact of the policies enunciated, from time to time, by the Government has enabled the pharmaceutical industry to meet almost entirely the countrys demand for formulations and substantially for bulk drugs. In the process the pharmaceutical industry in India has achieved global recognition as a low cost producer and supplier of quality bulk drugs and formulations to the world. Two major issues have surfaced on account of globalization and implementation of our obligations under TRIPs which impact on long-term competitiveness of Indian industry. These have been addressed in the Pharmaceutical Policy-2002. The main objectives of this policy are:a. Ensring abundant availability at reasonable prices within the country of good quality essential pharmaceuticals of mass consumption. b. Strengthening the indigenous capability for cost effective quality production and exports of pharmaceuticals by reducing barriers to trade in the pharmaceutical sector. c. Strengthening the system of quality control over drug and pharmaceutical production and distribution to make quality an essential attribute of the Indian pharmaceutical industry and promoting rational use of pharmaceuticals. d. Encouraging R&D in the pharmaceutical sector in a manner compatible with the countrys needs and with particular focus on diseases endemic or relevant to India by creating an environment conducive to channelising a higher level of investment into R&D in pharmaceuticals in India. e. Creating an incentive framework for the pharmaceutical industry which promotes new investment into pharmaceutical industry and encourages the introduction of new technologies and new drugs. NATIONAL PHARMACEUTICALS POLICY 2006 The first comprehensive Drug Policy of 1978 and thereafter the Drug Policy of 1986 together with the application of process patent under the Patent Act of 1970 successfully paved the way for development of indigenous pharmaceutical industry which went into the production of generic drugs in a big way. A conducive environment for success was provided by the then prevailing trade and economic policies. During the period range and market share. The key Policy objectives include: a) To ensure availability of good quality medicine within the country at reasonable prices.
Page | 4

Policy of GOI on Drugs & Pharmaceuticals Industry b) To improve accessibility of essential medicines for common man particularly poorer sections of population. c) To facilitate higher investment for increased production of good quality medicines. d) To promote greater research and development in pharmaceutical sector by providing suitable incentives in this regard. e) To enable domestic pharma companies to become internationally competitive by implementing established international guidelines. f) To facilitate higher growth in exports of APIs and formulations by reducing the barriers to international trade in pharmaceuticals sector. g) To develop India as the preferred global destination for Pharma R&D and manufacturing. h) To facilitate implementation of the Health Policy of the Country. PATENT Indian pharmaceutical industry has taken a quantum leap thanks to The Patents Act, 2005 (Amendment to The Patents Act, 1970). The Patent Act of 1970 saw the exodus of the multinational companies (MNCs) as it recognized only process patents. Indian companies had the freedom to copy drugs manufactured by patent holding companies without paying any kind of royalty. They were protected by the patent act to legally reverse-engineer internationally patented drugs and sell it within India and also in those markets that did not conform to drug patents. To slow down the control of MNCs and cut down their dominance of the Indian market, the Government passed the Drug Price Control Order (DPCO) of 1970. The order provided process patents for 5 to 7 years and was seen as a move to make the domestic market self-reliant. For the MNCs, India ceased to be a profitable market and they slowly left the country and Indian companies grabbed the opportunity and stepped in. As a result, the country became self-sufficient in the manufacturing of basic drugs. From the 1970s to 2005, many manufacturing units were established and researches were done to develop new processes for several drugs. Also, the DPCO put a limit cap on the prices of essential, lifesaving drugs, resulting in their availability in the domestic market at affordable prices. The amendment act of 2005 altered the practice of manufacturing drugs without conforming to the patent laws of other countries. The act barred the companies from producing patent products without paying patent royalty. As India had signed the General Agreement on Trade and Tariffs (GATT) and the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement and joined GATTs successor World Trade Organization (WTO) in 1994 it had to amend its patent act. The amendment in 2005 opened the doors for MNCs. This time around, they have shed their reluctance to invest in India and are also collaborating with domestic players. Most of these companies are outsourcing their manufacturing to the country. The Indian-based companies with more than two decades of experience in manufacturing drugs thanks to a process patent system is benefiting them in the changed scenario. The MNCs are also bringing in their technology and research and development (R&D) team to India. Indian companies are also continuously increasing their investment in R&D and not limiting themselves to only manufacturing drugs. They are spending around 6 to 8 percent of their turnover on R&D earlier these companies did not spend more than 1 percent on R&D. R&D expenditure of Indian Companies in the year 2010-11 was USD 520 million, equivalent to 6.6% of pharmaceutical sales. DRAFT NATIONAL PHARMACEUTICALS PRICING POLICY, 2011 (NPPP-2011) In the year 2000, further liberalization in the economy was effected, in light of which, Foreign Direct Investment (FDI) in the pharmaceutical sector was brought in the automatic route and the limit raised up to 100%. Following this, a new
Page | 5

Policy of GOI on Drugs & Pharmaceuticals Industry pharmaceutical pricing policy was introduced in the year 2002 which further liberalized the span of control over pricing. The 2002 Drug Policy was, however, challenged in the Karnataka High Court, which by order dated 12.11.2002 issued stay on the implementation of this Policy. This order was challenged by the Government in the Supreme Court which vacated the stay but direct that the GOI shall consider and formulate appropriate criteria for ensuring essential and life saving drugs not to fall out of the price control and further directed to review drugs, which are essential and life saving in nature. In the light of the order of the Supreme Court, it was decided that a fresh Pharmaceutical Pricing Policy be formulated and accordingly, the 2002 Drug Policy was never implemented and the 1994 Drug Policy continued to be applicable and continues till date. And in the mean time, even though the draft Policy of 2006 notified, it never saw the light of the day as it advocated greater control on medicine prices. The Drug Policy of 1994 needs to be modified in the context of changed global environment for industry as well required changes in the mechanism to make available essential medicines to the masses. The objectives a) To put in place a regulatory framework for pricing of drugs so as to ensure availability of essential medicines at reasonable prices b) To provide sufficient opportunity for innovation and competition to support the growth of industry, thereby meeting the goals of employment and shared economic well being for all. c) Promotion of research and development in the pharmaceutical sector, directly through research institutions and universities, as well as through provision of seed capital, venture capital funding and subsidies to innovative drug companies. d) Strengthening and rationalizing the drug regulatory system. e) Enablement of domestic pharmaceutical companies to achieve international GMP/GLP and GCP standards f) Development of Human Resource Development, particularly in critical areas to meet the requirements of pharmaceutical industries. g) Setting up of common infrastructure through pharma development parks, pharma cluster schemes in order to strengthen and facilitate the smaller units in the pharmaceuticalindustries.


Trade names are regulated by the Trade and Merchandise Marks Act (TMMA). The TMMA provides for registration of trademarks for a period of seven years at a time, renewable after each period. For any item, trademarks should not be objectionable from a religious or social point of view. They should not contravene the Emblems and Names (Prevention of Improper Use) Act, 1950. They should also not yet be registered or applied to be registered in India. The trademark can be registered even if the item is not produced or sold in India at present. A foreign trademark can be used without any restriction. Foreign companies can license their trade mark to their local subsidiaries or joint ventures. The Indian Copyright Act, 1957 also provides protection for unique logos and designs on packaging.


Price control over drugs was first introduced in the country in the aftermath of the Chinese aggression with the promulgation of the Drugs (Display of Prices) Order, 1962 and the Drugs (Control of Prices) Order, 1963. These were promulgated under the st Defence of India Act. With these orders, the prices of drugs were frozen w.e.f. the 1 April, 1963. Thereafter, a series of price control regimes were notified through various Orders in the country from time to time based on different principles, in which the span
Page | 6

Policy of GOI on Drugs & Pharmaceuticals Industry of control of prices as well as the nature of control of prices varied from Order to Order as per the disposition of the respective Drug Policies. These were the Drugs Prices (Control) Order of 1966, the Drugs Prices (Control) Order of 1970 issued under the Essential Commodities Act 1955 by declaring drugs to be essential commodities under the EC Act, 1955. Thereafter the Drugs Prices (Control) Order of 1978, Drugs Prices (Control) Order, 1979 and Drugs Prices (Control) Order, 1987 were issued following the declaration of the Drug Policy, Drug Policy, 1979 and Drug Policy 1986. All these Policies were broadly based on the principle of effecting control over prices of essential drugs, and later bulk drugs, as well as availability of drugs while at the same time attending to the requirements of the indigenous industry for growth cost effective production, innovation and strengthening of capacity. Price controls are exercised on certain drugs by virtue of the Drugs (Prices Control) Order1995 (DPCO), i n t h e f r a m e w o r k o f t h e E s s e n t i a l C o m m o d i t i e s A c t (ECA). The D P C O i s t h e responsibility of the Ministry of Chemicals and Fertilisers and is supervised by the National Pharmaceutical Pricing Authority (NPPA). It o u t l in es the classification of price-controlled products and methods of price fixation and revision. The NPPA monitors drug prices by fixing and revising them. The 347 price-controlled drugs under the Drugs (Prices Control) Order 1979 were brought down to 143 in the Drugs (Prices Control) Order 1987. Under the DPCO-1995, there are 74 bulk drugs and their formulations under price control (known as scheduled drugs) covering significant percentage of the total pharmaceutical market in India. Only a few OTC actives, e.g. acetylsalicylic acid and ephedrine and its salts, fall under the current DPCO price control. The price of scheduled drug fixed by NPPA is revised from time to time. The manufacturer is not allowed to increase retail price of scheduled drugs without approval of NPPA. However, prices of non-scheduled drugs are fixed by the manufacturer subject to a maximum increase of 10% on the prevailing price over a 12-month period. However, at the beginning of 2010 the Policy was still under review by a government-appointed high level committee of cabinet ministers.

Imports of formulations into India are negligible given the price disadvantage arising from import tariffs and local manufacturing cost advantages. Further, the product approval process for new molecules can be difficult and time-consuming. Price controls are also an added negative factor. The Ministry of Health and Family Welfare has published a Gazette Notification GSR no. 604 (E) dated 24.08.2001 amending the various provisions of the Drugs & Cosmetics Rules, thereby introducing a new provision for the registration of the manufacturing premises of foreign drug manufacturers and individual drugs prior to their import into the country. The notification also introduced a few other provisions, e.g. enhanced import licence fees, increased validity period of licence, deletion of exemption from requirement of import licence for bulk drugs for actual users, requirement of minimum 60% of residual shelf life for imported drugs and provisions for import of small quantities of new drugs by Government hospitals for the treatment of their patients, etc. Under these provisions, foreign manufacturers have to apply for a registration certificate for their manufacturing premises and the individual drugs they want to export to India. Authorised agents of foreign firms in Indi a can make the appl i cat i ons . The documents required for registration certificates are clearly specified in the amendments. The validity of registration certificates is three years from the date they are issued. According to the modified rules, an import licence is required for all types of drugs instead of the previous import licence requirements for Schedule C & C (1) and Schedule X drugs only.
Page | 7

Policy of GOI on Drugs & Pharmaceuticals Industry


INTELLECTUAL PROPERTY RIGHTS As a founder member of the World Trade Organization (WTO), India was obliged to introduce an Intellectual Property Rights (IPR) regime compliant with TRIPS (Trade Related Aspects of Intellectual Property Rights) in January 2005. India ushered in a product patents regime by introducing The Patents (Amendment) Ordinance, 2004 on 26 December 2004. After debating the provisions of the Ordinance, Parliament later passed The Patents (Amendment) Bill, 2005. This signalled the start of a new era for the pharmaceutical industry in India. The 2005 Act was expected to boost R&D, help bring in Foreign Direct Investment and contribute to improved healthcare. As of now, patents can only be granted to new chemical entities. However, a committee has been formed to study the patentability of Novel Drug Delivery System (NDDS), polymorphs, metabolites etc. FOODS STANDARD & SAFETY ACT (FSSA) This law was passed in 2006 by Indian Parliament, but guidelines were not in place. Food Standards & Safety Act will finally include guidelines that clearly state which supplements can be classed as foods instead of drugs, allowing mass market sale. These guidelines will remove ambiguities for VMS marketers and could encourage more pharma companies to move into OTC, food companies to move into functional foods and FMCG companies to shift to cosmeceuticals, all under the wellness umbrella.

INDIA TO RETAIN 100% FOREIGN PHARMA INVESTMENT India will continue to permit 100% foreign direct investment (FDI) in new ("greenfield") pharmaceutical industry projects, but foreign takeovers of Indian drugmakers will come under tighter scrutiny, the cabinet agreed on 10th October 2011. FDI proposals for mergers and acquisitions of Indian drugmakers - known as "brownfield" investments - will in future have to be channelled through the Foreign Investment Promotion Board (FIPB) for a period of up to six months, during which time the Competition Commission of India (CCI) will examine the proposed deal. The powers of the CCI are to be strengthened. The meeting, which was chaired by India's Prime Minister Manmohan Singh, and also included the ministers of health, commence and finance, was called to discuss concerns expressed by health officials and the domestic drug industry that India's liberal FDI regime for the pharmaceutical sector, which was introduced in 2001, is making medicines less affordable for the population by forcing up prices. They are particularly concerned about up to 61 topselling drugs worth around $80 billion which are due to go off-patent by 2013, warning that the prices of these products will be unlikely to drop if they are still owned by multinationals. The foreign takeovers are also harming local access by diverting Indian-made drugs into more lucrative markets elsewhere in the world, say the critics, who also point out that the generous public funding for research made available by the government should be used to provide benefits for the Indian population, rather than going into the coffers of foreign

Page | 8

Policy of GOI on Drugs & Pharmaceuticals Industry owners. Moreover, they note that since the FDI policy was introduced 10 years ago, only 10% of such investments have gone into greenfield investments. The government had earlier set up a committee chaired by Arun Maira, a member of the Planning Commission, to investigate these concerns, which had been growing as a result of the total or partial takeover of six large Indian drug makers during 2006-2010. One of the panel's areas of scrutiny was whether the CCI should still be the official watchdog for the sector or whether that responsibility should move to the FIPB. Mr Maira and his colleagues decided that the CCI should retain its responsibilities in this area but with increased powers, the ministers agreed with this advice. The Finance Ministry had opposed any proposals to restrict foreign investment in the sector. Officials have in the past been reported as saying that arbitrary price rises could be tackled through the use of compulsory licensing and the Drug Price Control Order (DPCO), and that the CCI could dismantle any attempts to construct industry cartels.
DRUG SCENARIO India and China combined Global Drug Discovery represent close to 30% of the total Rest of Market drug discovery expenditure. the world However, with the US and Europe 13% representing 52% of the Europe 25% expenditure, there is a huge India & opportunity for the two fastest China growing economies in the world. 30% USA With growing financial pressures 27% on the Western pharmaceutical companies and rapid development Japan of the Indian and Chinese market, 15% coupled with high quality R&D at competitive costs, the percentage Sources: Cygnus market resources split is expected to change in favour of these two countries in the years ahead. So many countries like Europe, USA, Japan, India and China remaining rest of the world has supply the drugs in a very high in the percentage the total market that is shared by the about 67%. The cost involved in bringing a new drug to market, is approx. US$1000m. It takes 10 to 15 years to a new drug to bring in the market.

A beginning has been made with the signing of General Agreement on Tariffs and Trade in January 2005 with which India began recognizing global patents. Soon after, the Indian pharmacy market became a sought after destination for foreign players. Foreign direct investment into the countrys pharmacy industry touched US$ 172 million during 2005-06 having grown at a CAGR of 62.6 per cent during the period beginning 2002-06.

Indian clinical research industry is estimated at over US$ 100 million. It complies with ICH- GCP protocols. It is a growing body of trained and experienced investigators. India has captured about 10 per cent of the global clinical research market in 2010.

Page | 9

Policy of GOI on Drugs & Pharmaceuticals Industry

There are 74 U.S. FDA-approved manufacturing facilities in India, more than in any other country outside the U.S, and in 2005, almost 20 per cent of all Abbreviated New Drug Applications (ANDA) to the FDA were filed by Indian companies. Growth in other fields notwithstanding, generics are still a large part of the picture. London research company Global Insight estimates that Indias share of the global generics market will have risen from 4 per cent to 33 per cent by 2007. The focus of the Indian pharma companies is also shifting from process improvisation to drug discovery and R&D. the Indian companies are setting up their own R&D setups and are also collaborating with the research laboratories like CDRI, IICT etc.
Market Share of Different Pharmaceutical Product Categories Opthologicals 2% Antidiabetics 4% Neuro psychiatry 5% Gynaecology 5% Dermatological 5% Pain/analgesic 10%

Others 11%

Anti-infective 17% Gastrointestinal 11%

Cardiac 10% Vitamins/minerals /nutrients 10% Respiratory 10%

Source: Report on Indias Drugs & Pharmaceutical Industry January 2011


Some practical issues will need to be addressed, regardless of the business model selected. Infrastructure deficits continue to exist, although some are being addressed. Intellectual property protection has improved substantially but some holes remain. And while the regulatory environment in India has improved substantially in recent years, the industry still faces a number of question marks. Finalisation of Government policies around drug price control, access to OTC drugs, tax policy, intellectual property protection and infrastructure spending is still pending. Indias appeal is growing rapidly in a number of respects. It has long been a formidable player in pharmaceutical manufacturing, but its socio-economic strengths provide even greater grounds for optimism. If the economy outpaces that of every other emerging country for the next half century, as many commentators expect, large portions of the population will be able to afford modern medicines. Indias increasing scientific expertise will also equip it to play a significant role in researching and developing those drugs. It has a large pool of highly educated, English speaking scientists who can undertake research and conduct trials more cheaply and in some cases faster than their Western peers. These are major advantages in a world where drug development costs are soaring and getting to market fast is vital.

Page | 10

Policy of GOI on Drugs & Pharmaceuticals Industry

Ministry of Health and Family Welfare: http://mohfw.nic.in/ Drug Controller General (India): http://mohfw.nic.in/ph/tdghs.htm Central Drugs Standard Control Organization (CDSCO): http://cdsco.nic.in/index.html Medicines laws: http://cdsco.nic.in Department of Chemicals (Ministry of Chemical & Fertilizers): http://chemicals.nic.in/ National Pharmaceutical Pricing Authority (NPPA): http://nppaindia.nic.in/index1.html Organisation of Pharmaceutical Producers of India (OPPI) www.indiaoppi.com Pharma Times October 11, 2011 Issue http://www.drugscontrol.org Research and Markets report, Indian Pharma Sector Forecast 2014. A Brief Report Pharmaceutical Industry in India, published in January 2011 India Pharma 2020: Propelling access and acceptance,realizing true McKinsey & Company, Asia Pacific Business & Technology Report October 5 2011 ational Portal of India N Drug Policy 1986
* * * * Modifications in Drug Policy 1986 Drugs (Prices Control) Order 1995 Pharmaceutical Policy 2002 Draft National Pharmaceuticals Policy, 2006

Pharma Professional, Vol 62 May 2011 Issue, [Joint Venture of Indian Association (IPA) and Cygnus] Directorate General of Commercial Intelligence and Statistics (DGCIS) Kolkata

Global pharma looks to India: Prospects for growth: Report of Pricewaterhouse Coopers