PHARMA -RAJIV

CONTENTS
Sector Overview
Summary Introduction Research, Patents and GATT impact Glo al scenario Indian scenario !PCO "a#or Therapeutic Se$ments Summary Analgesics & Anti-pyretics Antacids and Anti-ulcerants Antibiotics Anti-TB Anti-parasitic & Anti-fungal Cardiac therapy Corticosteroids Nsaids, Anti-rheumatism Respiratory System ailments itamins Anti-anaemic Anti-diabetes Anti-emetic Anti-histamine Anti-malarial CNS and !sychiatric therapy "yneacologicals Nutrients & #ineral Supplements Anne%ure $ndian !atents Act %&'( "lobal price )ariations - *ormulations !atent e+piry dates Bul, drugs contents Bul, drug inde+ Company Pro&iles Cipla 'td -r Reddy.s /aboratories /td 0-#erc, 1$ndia2 /td

"la+o $ndia /td

No)artis $ndia /td 3oechst #arion Roussel /td
RAJIV R.S.
1

PHARMA -RAJIV

$pca /aboratories /td 4noll !harmaceuticals /td 4opran /td /upin /aboratories /td Nicholas !iramal $ndia /td !ar,e -a)is $ndia /td !fi5er /td Ranba+y /aboratories /td Rhone !oulenc 1$ndia2 /td Smith,line Beecham !harmaceuticals 1$ndia2 /td Sun !harmaceutical $ndustries /td 6oc,hardt /td 6yeth /ederle /td (pdates $mpact analysis on N!!A7s price re)ision on companies Trend analysis for *8&& *inancial analysis for 9% *8:(((

RAJIV R.S.

PHARMA -RAJIV

INTRO!(CTION TO T)E P)AR"ACE(TICA' IN!(STR*

Pharmaceuticals
!harmaceuticals are medicinally effecti)e chemicals, ;hich are con)erted to dosage forms suitable for patients to imbibe< $n its basic chemical form, pharmaceuticals are called bul, drugs and the final dosage forms are ,no;n as formulations< =sage of pharmaceuticals is go)erned by the underlying medical science< The four primary medical sciences are as under< Allopathy or modern medicine has gained global popularity< Ayur)eda, remedies< =nani, ha)ing Chinese origin, is pre)alent in South 0ast Asia< 3omeopathy, founded by a "erman physician, ;as fairly popular in the early %&th century< 6orld-o)er, the pharmaceuticals industry is focussed on an ancient $ndian science, mainly uses herbal

Allopathy, the most modern medical science< >ther modes of medical treatment such as 3omeopathy, Ayur)eda and =nani are more pre)alent in third ;orld countries<

RAJIV R.S.

PHARMA -RAJIV

+ul, !ru$s
Bul, drugs are medicinally effecti)e chemicals< They are deri)ed from ? types of intermediates 1ra; materials2, namely !lant deri)ati)es 1herbal products2 Animal deri)ati)es eg $nsulin e+tracted from bo)ine pancreas

Synthetic chemicals
Biogenetic 1human2 deri)ati)es eg 3uman insulin Bul, drug disco)ery re@uires intensi)e and e+pensi)e research< So ne; drugs are patented% by the inno)ator to ensure commercial gains on his R&- in)estment< 6hen a drug goes offpatent it becomes generic< Bul, drugs can be broadly categorised as under patent generic or off-patent< A patent pro)ides e+clusi)ity of manufacturingA licensing to the disco)erer ie patent holder for a stipulated time period<

-ormulations
-octors, post-diagnosis to cure a disease or disorder in the patient primarily prescribes formulations< To pre)ent misuseA incorrect administration, most formulations are disbursed by pharmacies only under medical prescription and these are called ethical products< 3o;e)er, some formulations such as pain balms, health tonics etc can also be purchased by users directly< These are called o)er-the-counter 1>TC2 products< *ormulations can be categorised as per the route of

administration to patients, )i5 >ral ie tablets, syrups, capsules, po;ders etc ta,en internally<
RAJIV R.S.
4

PHARMA -RAJIV

Topical ie ointments, creams, li@uids, aerosols that are applied on the s,in< !arenterals ie sterile solutions inBected in an intra)enous or intramuscular fashion< >thers such as eye-drops, pessaries, surgical dressings etc<

"anu&acturin$ Process
Bul, drugs are prepared by appropriate chemical reactions of naturalA synthetic intermediates under controlled conditions< *ormulations manufacture is a batch mi+ing process< Right dosage of the bul, drug 1acti)e ingredient2 is compounded ;ith compatible substances, to ma,e the formulation palatable< !ac,ed as per the physical form - bottles 1for li@uids2, blister strips 1for tabletsA capsules2 or ampoules 1for po;ders2, each formulation pac, has the e+piry date and storage instructions printed on it< Stringent @uality control is e+ercised at all stages<

Therapeutic Se$ments
*or ease of prescription, bul, drugs and their formulations are classified as per their end use ie therapeutic effecti)eness against a particular disease or ailment< *or eg medicines are categorised as anti-ulcer, anti-tuberculosis etc< The maBor

therapeutic categories and the ,ey drugs therein are detailed chapter-;ise later<

IN!IA.S CO"PETITI/E A!/ANTAGE

RAJIV R.S.

PHARMA -RAJIV

Characteristics
The ,ey characteristics of the generic industry areC !roducts enBoy lo; unit margins compared ;ith patented prescription drugs< $t is high )olume mar,et ;ith lo; profit margins< !roducts are at a constant disad)antage against those of inno)ator companies< !rocess de)elopment s,ills are of critical importance The emphasis is on a lean cost structure that is dominated by manufacturing costs<

India.s Opportunity
$ndian companies are ;ell positioned to e+ploit the generics mar,et< Their competiti)e ad)antage arises from the follo;ing areasC

)i$h Process !evelopment S,ills0

This ability enables companies to de)elop cost effecti)e and non infringing processes for products going generic< $ndia has a history of de)eloping such processes due to the pre)alence of process patents< 'ow "anu&acturin$ Cost +ase1 The cost of manufacturing is lo;er in $ndia due to lo; labour costs and lo;er e@uipment cost 1especially reactors, boilers, etc2<

RAJIV R.S.

PHARMA -RAJIV

IN!(STR* SI2E
The global pharmaceuticals industry, presently )alued at

=SDE(Fbn, is proBected to gro; at a CA"R of GH pa in the ne+t F years< $n %&&G mar,et gre; by 'H as against I<IH in the pre)ious year< "ro;th rates differ across nations, ;ith the de)eloping nations li,e South 4orea, Tai;an, $ndia etc notching high gro;th in the range of %:-%FH pa< This can be attributed to healthcare cost-containment pressures ,eeping pharmaceuticals prices lo; in de)eloped countries, ;hile e+port opportunities and lo; domestic per capita consumption ha)e pro)ide higher gro;th potential in the de)eloping nations<

Re$ional "ar,et Shares

6ithin the global pharma mar,et, regional shares are e+pected to change, due to faster gro;th in the de)eloping nations< The top ten ;orld;ide mar,ets represent G? percent of all global audited pharmaceutical sales< The =nited States, ;hich is the largest mar,et, gre; by %% percent to D&&<Fbn in %&&G, representing nearly ?( percent of the total ;orld;ide mar,et< Japanese pharmaceutical industry declined by %H as the Japanese go)ernment re-si5es

pharmaceutical pricing< Japan remains the ;orld7s second largest mar,et ;ith sales of DEG<Gbn< 6ithin the top fi)e 0uropean mar,ets, "ermany remains in the lead, achie)ing sales of D%G<:bn< The fastest gro;ing 6estern 0uropean mar,ets in %&&G ;ere Spain, gro;ing %% percent, and $taly, gro;ing & percent
RAJIV R.S.
7

PHARMA -RAJIV

o)er %&&'< Bra5il ran,s se)enth largest ;orld pharmaceutical mar,et, but e+perienced a F percent negati)e year-to-year gro;th due to economic conditions< >f the top ten mar,ets, all but Japan and Bra5il sho;ed accelerated gro;th in %&&G< Central 0urope gre; at :G<F percent, #iddle 0ast Africa at %(<% percent and South 0ast Asia at G<? percent Country =S 3445 sales 67 n8 %(( :F%<E 9 o& sales ?( G? 9 $rowth yoy %%

Total Source: Scrip

RAJIV R.S.

PHARMA -RAJIV

Generic Competition $n the ne+t %( years, an estimated I( maBor pharmaceutical products ;ith sales 1;hile under patent2 in e+cess of =SD?(bn ;ill lose patent protection< Refer Anne+ure E for a partial list of drugs going off-patent< The large number of inno)ator products loosing patent protection ;ill foster robust gro;th in the generic bul, drugs and formulations industry< Though some brand name companies do o;n and operate generic subsidiaries, the

commodity based pricing structure of generic drugs ;ill not sustain R&- programs< So, funds a)ailable for R&- ;ill most li,ely depend on a Company.s ability to disco)er, patent and bring to mar,et a steady stream of ne; & inno)ati)e products< $n manufacture of generics, the de)eloping nations li,e $ndia, China, Tai;an, 4orea etc ha)e ad)antage of lo;er manufacturing and manpo;er costs< #oreo)er re)erse engineered drug e)en ;hile under-patent, helps local pharmaceutical manufacturers in such countries to target the first ;a)e of generic competition to hit the mar,ets in de)eloped nations ;hen the drug goes offpatent< /ater, increasing competition brings do;n prices and margins< *or detailed report on 6orld "enerics mar,et loo, into the follo;ing =R/s<

3: Summary
2. $ntroduction 3. The appro)al process
RAJIV R.S.
9

PHARMA -RAJIV

4. 3istory and de)elopment 5. #anaged Care in the =S 6. $ndia7s competiti)e ad)antage 7. >ptions A)ailable

Summary
The factors dri)ing the international generic drug industry include patent e+pirations of many of the best selling drugs ;ithin the ne+t decade, the increasing presence of managed care and other cost-containment efforts in the =<S< and international mar,ets< Because of these factors, the a)erage annual gro;th rate 1CA"R2 for generic drugs has been nearly double that for the o)erall retail pharmaceutical mar,et ;orld;ide for the past se)eral years, a)eraging about %%H bet;een %&&: and %&&G< By :((:, it is proBected that, in the =<S<, generics ;ill surpass branded products in the number of ne; prescriptions ;ritten< "enerics represent a lesser percentage of prescriptions ;ritten in most other countries but are gaining share almost uni)ersally< $n %&&G, generics represented appro+imately &H of the

international pharmaceutical mar,et and %:H of the =<S< drug mar,et in dollars< The generic drug mar,et is proBected to approach double-digit gro;th o)er the ne+t three years,

compared to FH to IH annual gro;th proBected for branded products< The ,ey success factors in the generic mar,et include a lo; cost manufacturing
RAJIV R.S.

base

and

process

de)elopment

s,ills<

Also,
10

PHARMA -RAJIV

regulatory appro)als are time and capital intensi)e< $ndia has the re@uisite s,ills and is ;ell positioned to e+ploit the gro;ing mar,et< Companies li,e Ranba+y, 6oc,hardt and Cheminor ha)e had some success in the mar,et but still ha)e a long ;ay to go< Selection of the right alliance and strategy ;ill be critical for success<

"a#or Therapeutic Se$ments

The top ten therapeutic segments account for nearly E(H of the total ;orld mar,et< Three out of the leading ten, cholesterol & triglyceride Reducers, antidepressants and antipsychotics, are gro;ing at more than :(H yoy< The Anti-ulcerant therapeutic segment, ;hich represents

treatments for stomach ulcers, )alued at D%:<&bn, remains the leading therapeutic class ;orld;ide in %&&G, as it has for the past eight years< /osec 1omepra5ole2, the ;orld7s leading antiulcerant product, accounts for nearly E(H of all sales< The cholesterol & triglyceride reducers, drugs used to reduce cholesterol in the bloodstream, is gro;ing at :(H yoy<

Antidepressants, used to treat chronic depression, are also gro;ing at more than :%H yoy< >utside of the top ten therapeutic segments, by far the fastest gro;ing sub-class is 0rectile -ysfunction, ;hich gre; by :''H in %&&G, dri)en by the bloc,buster launch of iagra< The second fastest gro;ing

segment is compounds used to treat heart indications, the

RAJIV R.S.

11

PHARMA -RAJIV

Angiotensin $$ Antagonists< Currently in FIth place, Angiotensin $$ Antagonists gre; last year by %(? percent to D%<% billion<

"a#or Therapeutic Se$ments In The Glo al "ar,et Therapeutic se$ment

Anti-ulcers 3445 sales 67 n8 %:<& 'E<G 9$rowth yoy E<( '<(

Total Source: Scrip

Options Availa le
The large and gro;ing mar,et ob)iously presents an opportunity for $ndian companies< 3o;e)er, entry into the mar,et is time and capital intensi)e, due to the intense regulatory process< The companies can choose from different options a)ailable -from being a bul, drug supplier to selling and mar,eting under o;n brand name< 6e e)aluate the )arious options belo;C

Sellin$ On Its Own

This is the highest le)el of the )alue chain< The in)estments here are high especially in setting up the distribution and mar,eting infrastructure< Also, the mar,et is consolidating )ery fast in the =S ;hich ;ill result in G-%( companies ha)ing the lion7s share<
RAJIV R.S.
12

PHARMA -RAJIV

A ;oint /enture <ith A !istri ution Company1 This is a more feasible option for $ndian companies as they do not ha)e to set up an infrastructure< At the same time, it can sell under its o;n brand name or co-brand the product ;hich increases its e@uity in the mar,et< *or instance, Ranba+y is selling cefaclor under its o;n brand name 1has a distribution alliance2 ;hile 6oc,hardt is company branding it ;ith Sidma, /abs<

Enterin$ Into 'on$ Term Supply Arran$ements

The large generic companies are no; loo,ing at sourcing their re@uirements from a fe; suppliers to ensure consistent @uality and higher commitment< Companies li,e /upin are loo,ing at such a strategy ;hich ;ill pro)ide stable business 1price ris, still remains2 ;ithout high mar,eting costs< Apart from the options mentioned abo)e, a large mar,et ;ill open up for lo; cost bul, drug manufacturing ;hich measures up to =S @uality standards< The in)estments re@uired are in upgrading the manufacturing standards and getting them

appro)ed from =S*-A< The ;hole regulatory cycle for different products is thus, a)oided< $t is a profitable option and medium si5ed companies li,e =nichem and Shasun Chemicals are ;or,ing on the same

'eadin$ Players
$n %&&G No)artis, #erc, and "la+o 6ellcome shared the top position in the global pharmaceutical mar,et< No)artis. sales
13

RAJIV R.S.

PHARMA -RAJIV

;ere dri)en by the strong performance of /amisil and Aredia, ;hile #erc, benefited from strong sales of Kocor, *osama+ and Co5aar< "la+o 6ellcome sa; gro;th from *li+onase and

Sere)ent< !fi5er at L?, is ;ell-poised to Bump ahead of its fourth position based on its %&&G gro;th rate of :%H aided by the continued success of its cardio)ascular drug Nor)asc and iagra<

The leading :( pharmaceutical companies account for more than F'H of all global sales< The percentage mar,et share of the leading %( companies increased slightly in %&&G, from EF<?H in %&&' to EI<%H in %&&G< 6ithin the top :( companies, 6arner-/ambert e+perienced the highest gro;th rate at E'H, thus mo)ing up from %Ith to %Fth place in the ran,ings< This gro;th ;as fuelled by the company7s cholesterol-reducing drug /ipitor ;hich gre; by %&&H, and Re5ulin, a ne; antidiabetic drug, up by &'H o)er %&&'< 0li /illy achie)ed %'H gro;th, ran,s &th ;ith the help of &FH gro;th of its antidepressant Kypre+a<

Top => Pharmaceutical Companies In The <orld In 3445

'eadin$ companies 3445 sales 67 n8 %(<I %?E<G 9 $lo al sales ?<: F'<: 9 $rowth yoy F &

No)artis

RAJIV R.S.

14

PHARMA -RAJIV

/eading :( companies Source: Scrip

RAJIV R.S.

15

PHARMA -RAJIV

)ISTOR* AN! !E/E'OP"ENT

The !evelopment O& Generic !ru$ Industry
"enerics ha)e al;ays been in e+sistence along ;ith branded pharmaceuticals< 3o;e)er, the industry ;as restricted to a fe; small players< The e)ent often ac,no;ledged as the start of the modern generic pharmaceutical industry ;as the appro)al of the -rug !rice Competition and !atent Restoration Act in %&G?< This la;, often called the M6a+man-3atch Act M permitted

manufacturers to file AN-As for generic )ersions of all post-%&I: appro)ed pharmaceutical products< The Act opened the floodgates for generic competition for pharmaceutical products, creating the modern generic

pharmaceutical industry< $n the first year follo;ing appro)al of the Act, more than %,((( applications for ne; generic drugs ;ere recei)ed by the *-A< The subse@uent gro;th of the generic pharmaceutical industry, from D:<I billion dollars in %&&( to nearly D%( billion in %&&G, ;as fueled by the e+piration of mar,et e+clusi)ity for an e+traordinary number of products, ma,ing them a)ailable for generic competition< The potential for companies to earn millions if first to mar,et ;ith generic products, resulted in a crisis that )irtually destroyed the generic industry four years after the passage of 6a+man3atch Act< The rush to launch generic )ersions of branded pharmaceuticals created intense pressures on the *-A to appro)e products, and on manufacturers see,ing to be first to
RAJIV R.S.
16

PHARMA -RAJIV

mar,et<

$n

the

late

%&G(s,

some

manufacturers

falsified

applications, going so far as to alter branded pharmaceuticals and submit these products as their o;n< The scandal slo;ed ne; product appro)als for all generic companies, ;ith the *-A appro)ing appro+imately G( AN-As in %&&(, as compared to more than :F( in %&G&< As an outgro;th of the scandal, the demand for heightened scrutiny of all aspects resulted in *-A inspections of manufacturers and testing firms, and the analysis of more than :,G(( samples of ;idely used generics< >)er the past decade, generic drugs ha)e more than doubled their share of the prescription mar,etNfrom %G<I percent at the end of %&G? to EI<F percent in %&&G< The large number of inno)ator products due to lose patent protection o)er the ne+t %( years ;ill foster robust gro;th in the generics industry<

RAJIV R.S.

17

PHARMA -RAJIV

-(T(RE O(T'OO?
Till no;, #NCs ;ere concentrating on the E maBor pharma mar,ets )i5 =SA, 0urope and Japan, mainly due to good patent protection for their products in these de)eloped nations< No; ;ith 6T> becoming a reality, patent la;s in de)eloping nations ;ill gradually become more stringent< Thus, #NCs are getting more inclined to strengthening their position in the fast gro;ing third ;orld mar,ets< 0+panding mar,et boundaries may help the #NCs spread their R&- costs o)er a larger base< This in turn ;ill partly offset the impact of healthcare cost containment pressures in the de)eloped nations< 3o;e)er, product pricing in the de)eloping countries ;ill ha)e to be significantly lo;er due to the latter.s poor per capita spending on healthcare< $n the de)eloping nations, local players are gearing-up to face the 6T> challenge< These players lac, the re@uisite financial muscle to ta,e on basic research< So, they are either angling for a tie up ;ith some #NC or focussing on the promising global generics mar,et 1for enhancing e+ports2< The large local players in the de)eloping nations ;ill be able to le)erage upon their established distribution net;or,, manufacturing facilities and field force to attract #NC partners< $n the ne+t F years the ;orld pharmaceutical mar,et is e+pected to gro; at CA"R of GH, ;ith global turno)er of D?(%bn in :((:< The fastest gro;ing regions are e+pected to be North America, the #iddle 0ast, Australasia, and South 0ast Asia 1including

RAJIV R.S.

18

PHARMA -RAJIV

China2< North America is e+pected to remain the largest pharmaceutical mar,et ;ith )olume gro;th boosted by increased prescription drug co)erage for #edicare and #edicaid patients under managed care schemes and ne; product launches< By :((:, =S pharmaceutical mar,et is e+pected to be in the )icinity of D%I&bn< 0urope is e+pected to register gro;th of mere F<GH in the ne+t F years, mainly due to price controls< "ermany, *rance and $taly are e+pected to ha)e gro;th rate much belo; the regional a)erage of F<GH< 0stimated gro;th of )arious regions are as follo;sC Re$ion North America

CAGR 9 634450=>>=8
&<G G<(

Total ;orld mar,et Source: Scrip

RESEARC) @ !E/E'OP"ENT EAPEN!IT(RE

#aBor =S pharmaceutical companies are e+pected to spend more than D%&<Fbn in %&&&, a Bump of %FH from %&&G< !fi5er is

RAJIV R.S.

19

PHARMA -RAJIV

e+pected to spend ma+imum, follo;ed by Johnson & Johnson and 0 #erc,<

Company R@! 3444 9 o& sales R@! 3445 9 o& sales 344B R@!

Source: Scrip Cancer research is the most acti)e area ;ith more than IF( products under de)elopment, follo;ed by cardio)ascular research ;ith more than :(( products< The global pharmaceutical industry is de)eloping more than %F( )accines and more than %(( products each for A$-S, psychiatric disorders, dermatologic conditions, blood and respiratory disorders< #aBor formulations e+pected to hit the mar,et in the ne+t three years areC

*ear =>>>
!roduct Company !fi5er

RAJIV R.S.

20

PHARMA -RAJIV

oricona5ole

RAJIV R.S.

21

PHARMA -RAJIV

*ear =>>3
Ariflo Smith4line Beecham

*ear =>>=
Acecol San,yo Johnson & Johnson

Reminyl Source: Scrip

RAJIV R.S.

22

PHARMA -RAJIV

"ANAGE! CARE IN T)E (S

<hat is mana$ed careC
$t is a system of health care deli)ery that aims to control costs by assigning set fees for ser)ices, monitoring the need for such procedures as tests and surgical operations, and stressing pre)enti)e care< #anaged health care systems include 3ealth #aintenance >rgani5ations 13#>s2O !referred !ro)ider

>rgani5ations 1!!>s2, net;or,s of doctors and hospitals that adhere to gi)en guidelines and fees in return for recei)ing a certain number of patientsO and point of ser)ice 1!>S2 plans, ;hich are similar to !!>s but allo; patients to go outside the net;or, for treatment, usually at a higher cost< An 3#> is a group that contracts ;ith medical facilities, physicians, employers and sometimes indi)idual patients to pro)ide medical care to a group of indi)iduals< #embers pay a monthly or yearly fee for all health care, including

hospitali5ation<

The emer$ence o& "ana$ed Care

Almost G( percent of employed Americans are no; co)ered by either an 3#>, a preferred pro)ider organi5ation, or a point-ofser)ice planNall e+amples of managed health care< 3#>s in the =S had FG<G million members in %&&I, up from EE<I million in %&&(< !oint-of-ser)ice plansNin ;hich enrollees can choose to recei)e ser)ices out of the managed care net;or, and still be

RAJIV R.S.

23

PHARMA -RAJIV

reimbursed for a portion of the costsNare responsible for much of the gro;th in managed-care plans among employed

Americans< $n %&&:, point-of-ser)ice plans co)ered only F percent of insured ;or,ersO their share had Bumped to nearly :( percent by %&&I< 3ealth maintenance organi5ations 13#>s2 in the =S had FG<G million members in %&&I, up from EE<I million in %&&(<

"ana$ed Care uses $enerics &or cost containment

#anaged-care organi5ations fre@uently use a )ariety of costcontainment techni@ues specifically for pharmaceutical

e+penditures< Amongst the most popular is generic substitution ie prescribing generics instead of parented drugs ;ithin the same therapeutic inde+< Generic Su stitution1 The percentage of 3#>s re@uiring generic substitution, ;here a brand-name drug is replaced ;ith a generic copy, increased from IE percent in %&&( to '% percent in %&&I< The more ;idespread use of cost-containment techni@ues in managed-care organi5ations is especially significant gi)en their increasing share of total prescription-drug payments< The

increasing trend to;ard managing drug benefits has spa;ned speciali5ed companies called pharmacy benefit managers 1!B#s2< !B#s no; pro)ide managed-pharmacy benefits for

appro+imately half the insured population in the =nited States<

RAJIV R.S.

24

PHARMA -RAJIV

!B#s manage pharmaceutical care only, mar,eting their ser)ices to employers, insurance companies and managed care groups<

Glo al Scenario
This chapter discusses in detail, the global pharma industry, its e)olution, si5e, composition, players and prospects<

Ori$in
9uinine e+tracted from the Cinchona tree bar, ;as used to treat malaria ;ay bac, in the year %I%&< But, Sir Ale+ander *lemming.s disco)ery of !enicillin in %&:& can be considered the real foundation of modern pharmaceuticals research< Ne+t maBor brea,through came in %&E: ;ith the synthesis of Sulphonamides in "ermany by 4larer and #iet5sch< The %F year period bet;een %&EG and %&FE became ,no;n as the age of antibiotics, due to unprecedented number of ne; anti-infectant agents introduced during the period< Antibiotics and accines ha)e played a maBor

role in near eradication of I maBor diseases, namely $nfluen5aA !neumonia, Tuberculosis, Syphilis, -iphtheria, 6hooping Cough and #easles< Benefit to man,ind C Bet;een %&:( and %&I(, the death rate, due to disease, in a year fell from %:,%:( nos per million persons to G,G(( nos per million persons< 0)ery ? years since %&IF, one additional year has been added to life e+pectancy at birth due to ad)ances in pharma R&-< !resently, in =SA, the a)erage life e+pectancy is o)er 'F years< As antibiotics enabled people to sur)i)e more ad)anced ages, researchers focussed on cell

RAJIV R.S.

25

PHARMA -RAJIV

biochemistry to find cures for more comple+ chronic diseases< -rug researchers are no; targeting to cure the underlying causes of diseases that are rooted in the human molecular structure<

Growth
!harmaceutical is a continuous gro;th industry, immune to economic recession and commodity cycles< Rising population, ne; disease incidence or resurgence of certain diseases spurs the gro;th< Therapeutic usage of pharmaceuticals )aries across the globe< 3ypertension and cardiac diseases are more

prominent in de)eloped countries ;hile infectious diseases li,e typhoid, tuberculosis etc are largely pre)alent in de)eloping nations<

Glo al Consolidation
!ressure on drug prices has made global pharmaceutical #NCs resort to mergers and alliances in a bid to reduce R&duplication & costs besides increase reach so as to spread research e+penditure o)er a larger base< The trend is e+pected to continue< The total number of alliances increased from %:( in %&GI to nearly ?(( in %&&?< These alliances often allo; pharmaceutical companies to dra; upon others. research

e+pertise, bring products to mar,et more rapidly and more effecti)ely and commerciali5e products< The ? mega mergers in the global pharmaceuticals industry in the last F years ha)e been "la+o-6ellcome, 3oechst-#arion-#errell -o;-Roussel, Ciba-

RAJIV R.S.

26

PHARMA -RAJIV

Sando5 1to form No)artis2 and 3oechst #arion RousselPRhone !oulenc 1to form A)entis2< #ore recently the global

pharmaceutical industry has ;itnessed fresh round of mergers P "la+o has agreed to merge ;ith Smith4line Beecham, !fi5er ;ith 6arner /ambert, 3oechst ;ith Rhone !oulenc< 6hen t;o #NCs announce a merger or strategic alliance, their global operations ha)e to be consolidated< $n each country, the parent companies. affiliatesA subsidiaries in turn underta,e a merger or strategic alliance, as the case may be< The entire process, across the ;orld, ta,es % to : years<

"ana$ed Care
#anaged Care is a,in to medical insurance and it usually follo;s the principle of encouraging generic substitutes to curtail medical e+penses< #anaged Care organi5ations fre@uently use a )ariety of cost containment techni@ues specially directed at lo;ering pharmaceutical e+penditures< These organi5ations, especially popular in =SA, are ,no;n as 3ealth #anagement >ffices 13#>s2< Typical cost reduction techni@ues of 3#>s are as underC -ormularies 1 irtually all 3#>s no; use formularies ie list of

products appro)ed for reimbursements< Closed formularies limit payment only to those products specifically listed in the formularies< $n %&&I, an estimated I:H of 3#>s in =SA used close formularies, up from EFH in %&&? and ?'H in %&&F< Closed formularies may deny co)erage for ne;er more e+pensi)e or e+perimental drugs regardless of the effecti)eness<

RAJIV R.S.

27

PHARMA -RAJIV

Therapeutic Substitution is defined as e+change by another drug ha)ing a different chemical composition from the prescribed one, usually but not al;ays ;ithin the same therapeutic class< $n some circumstances, 3#>s. pharmacists ma,e this e+change ;ithout the ,no;ledge of the prescribing physicians< >)er onethird of 3#>s no; use therapeutic substitutions up from ::H in %&&(< Step care therapy 1 !hysicians affiliated to 3#>s follo; a se@uence of treatment for a gi)en condition usually starting ;ith the lo; cost treatment and progressing to high cost only if pre)ious treatment is ineffecti)e< The patient may be denied immediate treatment ;ith most effecti)e treatment and as a result suffer a delayed reco)ery< !ercentage of 3#>s using this therapy has increased from :'H in %&&( to F%H in %&&?< Generic su stitution 1 !ercentage of 3#>s re@uiring generic substitution ie the same drug bring replaced ;ith a generic copy, has increased from IEH of 3#>s in %&&( to G'H of 3#>s in %&&?< S;itching patients from a brand name to a generic copy can cause problems particularly ;ith illness such as heart failure, cancer, diabetes and sei5ure disorders that are treated ;ith drugs that ha)e a narro; therapeutic range< -ramatically, increased use of generic substitution threatens to sacrifice @uality in the name of cost containment< $n the past decade, generic drugs ha)e doubled the share of the =S prescription mar,et from %G<IH at the end of %&G? to ?EH in %&&I<

RAJIV R.S.

28

PHARMA -RAJIV

#anaged

care

in

all

its

)ariations

is

transforming

the

pharmaceutical mar,et place< Cost containment has become the ne; bu55;ord, creating an intensely competiti)e mar,et< !harma companies introducing ne; products not only ha)e to pro)ide better therapeutic ad)antage but also do it at a lo;er cost to entice users< According to the Boston Consultancy "roup, ne; drugs appro)ed in %&&%-&: ;ere on an a)erage %?H cheaper than the best sellers already in the mar,et in their respecti)e therapeutic classes< $n some therapeutic areas, competition lo;ers prices e)en more< The intensifying competition is also sho;ing that the time during ;hich the first drug in therapeutic class is the sole drug and the second drug is introduced the time gap is shrin,ing< Another reason for this is the 6a+man 3atch Act, ;hich e+tended patent e+piry dates for some products in the =S upto a ma+imum of :: months< But, this literally reduced the period bet;een patent e+piry and to 5ero entry of generic competition into the mar,et< $ncreasing emphasis on generic substitution by #anaged Care organi5ations has led to more rapid mar,et share erosion for originator products, once the patent e+pires< *or originator drugs, ;hich first faced the generic competition in %&&( period, generics gained ?'H of the mar,et after %G months ;hereas for products, ;hose patent e+pired in %&&: period, generic competition claimed ':H of prescription ;ithin %G months<

RAJIV R.S.

29

PHARMA -RAJIV

IN!IAN SCENARIO
This chapter discusses in detail the e)olution and critical aspects of the $ndian pharma industry, maBor factors affecting players. profitability and future prospects<

+ac,drop
$n the F( years since independence, the $ndian pharmaceuticals industry has e)ol)ed significantly< $nitially, the #NCs had a near monopoly< They imported and mar,eted formulations in $ndia, mainly lo; cost generics for the masses and also a fe; specialities, life sa)ing, high priced products< 6ith the

"o)ernment increasing pressure against imports of finished products, the #NCs set up formulating units and continued importing the bul, drugs< $n the .I(s, the $ndian "o)ernment laid the foundation of the domestic pharmaceuticals industry by promoting 3industan Antibiotics /td 13A/2 and $ndian -rugs and !harmaceuticals /td 1$-!/2 for manufacture of bul, drugs< 3o;e)er, #NCs maintained a lead due to the bac,ing of their global R&-< 3igh cost for basic research deterred local players 1in the pri)ate sector2< 34B> 0 A Revolutionary *ear The $ndian !atent Act 1$!A2 ;as introduced< This has been one of the single most important factors to spur the domestic

pharmaceutical industry< =nder the $!A 1Refer Anne+ure %2, substances used in foods and pharmaceuticals could not be granted product patents< >nly process patents ;ere allo;ed for a
RAJIV R.S.
30

PHARMA -RAJIV

period of F years from date of patent grant or ' years from date of filing for patent, ;hiche)er ;as earlier< !rocess modifications to de)elop #NCs bul, drugs ;as far easier for the local players and there ;as an influ+ of domestic manufacturers, ;ho first started ma,ing bul, drugs and then progressed to formulations< *or local players a ;ide possible portfolio mi+ ;as possible ;hile the #NCs ;ere constrained to their parent company.s product range< 6ith the $!A, cost of local manufacture reduced, so also, absence of royalty payments on re)erse engineered drugs< -rugs !rice Control >rder 1-!C>2 ;as also introduced in %&'( by the $ndian "o)ernment< The -!C> effecti)ely put a ceiling on prices of certain mass-usage bul, drugs and their formulations so as to pre)ent any undue profiteering< This further deterred the #NCs as selling their products at much lo;er prices in $ndia meant global repercussions and possible uproar in their home countries< So #NCs curtailed ne; product launches, gi)ing further scope to $ndian players< *0RA 1/ate '(.s2 C #NCs ;ere compelled to reduce holding in their $ndian )entures to ?(H, else comply ;ith e+port

obligations to retain a ma+imum F%H sta,e< As a result some #NCs curtailed the scope of their operations< This further strengthened the position of the local pharmaceutical companies<

RAJIV R.S.

31

PHARMA -RAJIV

Present Scenario >)er :(,((( registered pharmaceutical manufacturers e+ist in the country< The mar,et share of #NCs has fallen from 'FH in %&'% to around EFH in the $ndian pharmaceuticals mar,et, ;hile the share of $ndian companies has increased from :(H in %&'% to nearly IFH< !S=s ha)e almost lost out completely< The sector has undergone se)eral policy as ;ell as attitudinal changes o)er the past t;o years< $t ;as one of the maBor beneficiaries from the budget proposals< Some of the positi)e steps ta,en ;ere C !harmaceutical industry is recogni5ed as ,no;ledge based industry< The go)ernment has plans to increase the in)estment in research and de)elopment< Rationali5ation of e+cise duty and reduction in interest rates in e+port financing< Additional deductions under $ncome Ta+ la;s for R&- e+penses< *oreign direct in)estments permit upto '?H through automatic route< Setting up t;o high le)els committees to re)ie; the drug policy for strengthening R&- capabilities and reducing the price control regime< Besides, the $ndian !arliament has enacted the re@uired changes in the $ndian !atent Act %&'( 1$!R2 regarding mailbo+

arrangement and e+clusi)e mar,eting rights 10#R2<

RAJIV R.S.

32

PHARMA -RAJIV

Emer$in$ Trends1 $ncreased focus on R&- C #aBor domestic players namely Ranba+y, -r Reddy.s /abs, Cipla, Nicholas !iramal and 6oc,hardt are aggressi)ely in)esting in R&-< -r Reddy.s /abs and Ranba+y ha)e already disco)ered one ne; chemical entity 1NC02 and are in !hase $$ and !hase $ of the clinical trail respecti)ely< 6oc,hardt is e+pected to come out ;ith in ne; molecule by *%:A:(((< #ar,eting tie-upsC -omestic players and #NCs ha)e entered into mar,eting arrangements to increase mar,et penetration and further strengthen positions in respecti)e therapeutic segments< Ranba+y has tied up ;ith Cipla, "la+o and 3oechst #arion for products in specific therapeutic segment< Similarly 3oechst #arion has tied up ;ith Nicholas !iramal< !roduct rationali5ationA brand ac@uisitionA company ac@uisitionC #ost of the top pharmaceutical companies are consolidating their position in the domestic mar,et either or through product

rationali5ation

brand

ac@uisition

company

ac@uisition<

3oechst, "la+o, 6oc,hardt and Ranba+y ha)e cut do;n their product portfolio in order to be more focussed< Similarly companies such as Sun !harma, Nicholas !iramal and -r Reddy.s /abs ha)e opted for brandA company ac@uisition to increase the therapeutic reach and mar,et penetration

RAJIV R.S.

33

PHARMA -RAJIV

Research, Patents @ <TO

This chapter discusses in detail, the importance of R&-, patents in the global pharma $ndustry and the changes in patent la;s to be enforced under 6T><

Research !riven Industry

!harmaceuticals industry is dri)en by a global need to con@uer disease< #edicines are de)eloped to treat ne; diseases or impro)e upon the e+isting treatment< An in-depth understanding of human physiology and disease mechanism is a pre-re@uisite to pharma R&-< To facilitate research, companies usually

concentrate on select therapeutic areas such as anti-ulcer, anticancer etc< #aBor diseases for ;hich ne; drugs are continuously being researched globally are A$-S, Al5heimer.s disease, arthritis 1rheumatism2, cancer, depression, diabetes, heart disease,

osteoporosis and stro,e<

+asic vs Process R@!

Basic research deals ;ith disco)eryA in)ention of a ne;

medicinally effecti)e chemical< !rocess R&- is basically re)erse engineering of a molecule through slight process modifications< Basic research is both time and cost intensi)e< 3undreds of molecules need to be analysed to determine possible

effecti)eness< *ollo;ing such laboratory testing, actual clinical trials are then carried out to determine the drug.s efficacy on patients< The process thus re@uires around %:-%F years and costs =SDEF(-?((mn per ne; chemical entity 1NC02< !rocess
RAJIV R.S.
34

PHARMA -RAJIV

R&- is far easier and costs are negligible compared to basic research<

Patents
!atents are a )ital aspect of the global pharma industry< !atent protection is essential to spur basic R&and ma,e it

commercially )iable< But, only the de)eloped nations endorse product patents< #ost third ;orld countries ha)e patent la;s but enforcement is totally la+< Some de)eloping nations li,e $ndia, 0gypt and Argentina allo; only process patent registration< As a result pharma R&- is concentrated amongst the pharma #NCs in =SA, Japan and 0urope< The leading #NCs ha)e a geographically ;idespread mar,et reach spanning almost the entire globe, hence their high R&- costs can be spread o)er a large user base< A researcher underta,es patent registration once a molecule sho;s some promise of therapeutic effecti)eness< !atent life counter starts running from the day the patent application is made< The patent office then starts the process of establishing that the molecule is uni@ue< The steps in)ol)ed areC 6ithin %G months of filing the application, a brief ;rite up of the molecular structure and its therapeutic utility is published as a public document< !atent office thereby in)ites obBections, if any, from third parties eg competitors< >bBections recei)ed are con)eyed to the applicant ;ho has a chance to defend or modify his claim to originality<

RAJIV R.S.

35

PHARMA -RAJIV

The modified claims are republished and once again obBections are in)ited< >nce the patent office is satisfied about the applicant.s claim, it grants the patent< The ;hole process ta,es ?-F years due to significant bac,log in the patent registration office< >nce a patent is granted in one of the de)eloped nations, it is relati)ely easier to get it in other countries< Also, certain patent authorities ha)e co)erage o)er many nations eg 0uropean !atent >ffice co)ers a large part of the 0uropean sub-continent< New !ru$ Approval 6N!A8 !rior to launching its products in any country, a pharma company underta,es patent registration to protect its o;n interests< To protect the interests of the consumers, it is necessary that the product be appro)ed by the drug authorities in that country< #ostly the process for see,ing appro)al is initiated alongside the patent registration process< An N-A 1Ne; -rug Application2 is filed ;ith the drug authorities - such as *-A in =S or -rug Controller in $ndia, detailing the ne; molecules. therapeutic properties< Then, clinical trials are carried out in E stages< Animal to+icity 1Testing on animals2< Trials on a fe; select )olunteers< Trials on a larger scale in hospitalsA institutions< -rug authorities appro)al has to be ta,en at each stage and only ;hen all three trial stages are successfully completed can the
RAJIV R.S.
36

PHARMA -RAJIV

product be launched< >nce a ne; product has been launched in any of the de)eloped countries li,e =SA, Japan or 0urope, it ta,es relati)ely lesser time to get appro)al from drug authorities in other countries< Glo al Price /ariations::: -rug prices )ary from country to country for a number of reasons including patent regulations, go)ernment controls,

income differences, currency e+change fluctuations etc< Patent re$ulation 1 !atents pro)ide the inno)ator e+clusi)ity of manufacture o)er the life of the patent< To ma+imise gains, pharmaceutical companies charge high premium on their under patent products< As patent la;s are stringent only in the de)eloped nations, accordingly formulation prices too are much higher in these mar,ets< A comparison of formulation prices bet;een $ndia, !a,istan, =SA and =4 is gi)en in Anne+ure :<

Government control 1 -ue to la+ of patent la;s in de)eloping countries, local players are able to infringe upon the original patent holder.s rights ;ithout payment of royalty< 3ence, the cost of manufacture of re)erse engineered pharmaceuticals is significantly reduced< To pre)ent undue profiteering by local pharmaceutical companies, the "o)ernments in such countries often impose price controls on popularly used drugs and formulations< 0)en some maBor industrialised countries of 0urope distort the mar,et mechanism by imposing price controls< This in

RAJIV R.S.

37

PHARMA -RAJIV

turn causes higher prices in free mar,ets li,e =SA, as companies try to enhance salesA profits by charging ;hat the traffic bears< Income disparity 1 $n de)eloping nations ;ith lo; per capita income and lo; standard of li)ing, pharma #NCs are faced ;ith the choice of either selling products at artificially lo; prices or denying patients the benefits of the drugs< :::Its impact -ue to fear of piracy and lo; product prices in third ;orld countries, most #NCs are reluctant to introduce their top-of-theline products in these places< So, patients in these countries compulsorily lose out on better treatment options< #aBority of the #NCs. conduct research on those diseases that affect the population in de)eloped nations ;hile tropical diseases get lo; priority< 6ide )ariations in pharma prices bet;een de)eloped and de)eloping nations ha)e resulted in increasing resistance to runa;ay healthcare costs in the de)eloped nations, especially =SA< 6ithin a therapeutic segment, generic substitutes to the under-patent drugs generally e+ist< Though often lesser effecti)e, they are able to reduce the cost of treatment significantly< This methodology has been gaining popularity in last fe; years< #anaged 3ealthcare, as it is called, is a,in to medical insurance and it usually follo;s the principle of encouraging generic substitutes to curtail medical e+penses<

RAJIV R.S.

38

PHARMA -RAJIV

-e)eloping nations that impose price controls reduce the competiti)eness of pharma companies in these countries< !rice & )olume controls pro)ide fe; incenti)es for inno)ation< 6hile price controls lo;er drug prices, they do not necessarily reduce healthcare costs< A more e+pensi)e drug may mean faster reco)ery, possibly eliminating future hospitalisation and hence, o)erall it may pro)e cost effecti)e<

<TO
-ue to pressure from the de)eloped countries, across the ;orld uniformity in patent la;s is being implemented under 6T> 16orld Trade >rganisation - earlier "ATT ie "eneral Agreement on Tariffs & Trade2< !resently, different countries ha)e different patent types and life period< 6T> has decided upon a product patent life of :( years in all countries< 3o;e)er, to ensure a smooth transition and pro)ide local players in the de)eloping countries, ample time for gearing themsel)es, a moratorium upto the year :((FAA- has been pro)ided< So, ne; products ie drugs

introduced after this date ;ill ha)e to be accorded product patent protection e)en in countries li,e $ndia or Argentina< 3o;e)er, e+isting pharmaceuticals and ne; products that ;ill be

introduced in the interim period ;ill all continue to be re)erse engineered in nations ;hich do not ha)e product patent la;s<

RAJIV R.S.

39

PHARMA -RAJIV

)ISTOR* AN! !E/E'OP"ENT

The !evelopment O& Generic !ru$ Industry "enerics ha)e al;ays been in e+sistence along ;ith branded pharmaceuticals< 3o;e)er, the industry ;as restricted to a fe; small players< The e)ent often ac,no;ledged as the start of the modern generic pharmaceutical industry ;as the appro)al of the -rug !rice Competition and !atent Restoration Act in %&G?< This la;, often called the M6a+man-3atch Act M permitted

manufacturers to file AN-As for generic )ersions of all post-%&I: appro)ed pharmaceutical products< The Act opened the floodgates for generic competition for pharmaceutical products, creating the modern generic

pharmaceutical industry< $n the first year follo;ing appro)al of the Act, more than %,((( applications for ne; generic drugs ;ere recei)ed by the *-A< The subse@uent gro;th of the generic pharmaceutical industry, from D:<I billion dollars in %&&( to nearly D%( billion in %&&G, ;as fueled by the e+piration of mar,et e+clusi)ity for an e+traordinary number of products, ma,ing them a)ailable for generic competition< The potential for companies to earn millions if first to mar,et ;ith generic products, resulted in a crisis that )irtually destroyed the generic industry four years after the passage of 6a+man3atch Act< The rush to launch generic )ersions of branded pharmaceuticals created intense pressures on the *-A to appro)e products, and on manufacturers see,ing to be first to

RAJIV R.S.

40

PHARMA -RAJIV

mar,et<

$n

the

late

%&G(s,

some

manufacturers

falsified

applications, going so far as to alter branded pharmaceuticals and submit these products as their o;n< The scandal slo;ed ne; product appro)als for all generic companies, ;ith the *-A appro)ing appro+imately G( AN-As in %&&(, as compared to more than :F( in %&G&< As an outgro;th of the scandal, the demand for heightened scrutiny of all aspects resulted in *-A inspections of manufacturers and testing firms, and the analysis of more than :,G(( samples of ;idely used generics< >)er the past decade, generic drugs ha)e more than doubled their share of the prescription mar,etNfrom %G<I percent at the end of %&G? to EI<F percent in %&&G< The large number of inno)ator products due to lose patent protection o)er the ne+t %( years ;ill foster robust gro;th in the generics industry<

RAJIV R.S.

41

PHARMA -RAJIV

P)AR"ACE(TICA'0GENERICS
Contents Sector Overview Summary $ntroduction The appro)al process 3istory amd de)elopment #anaged Care in the =S $ndia7s competiti)e ad)antage >ptions A)ailable

RAJIV R.S.

42

PHARMA -RAJIV

S(""AR*
The factors dri)ing the international generic drug industry include patent e+pirations of many of the best selling drugs ;ithin the ne+t decade, the increasing presence of managed care and other cost-containment efforts in the =<S< and international mar,ets< Because of these factors, the a)erage annual gro;th rate 1CA"R2 for generic drugs has been nearly double that for the o)erall retail pharmaceutical mar,et ;orld;ide for the past se)eral years, a)eraging about %%H bet;een %&&: and %&&G< By :((:, it is proBected that, in the =<S<, generics ;ill surpass branded products in the number of ne; prescriptions ;ritten< "enerics represent a lesser percentage of prescriptions ;ritten in most other countries but are gaining share almost uni)ersally< $n %&&G, generics represented appro+imately &H of the

international pharmaceutical mar,et and %:H of the =<S< drug mar,et in dollars< The generic drug mar,et is proBected to approach double-digit gro;th o)er the ne+t three years,

compared to FH to IH annual gro;th proBected for branded products< The ,ey success factors in the generic mar,et include a lo; cost manufacturing base and process de)elopment s,ills< Also,

regulatory appro)als are time and capital intensi)e< $ndia has the re@uisite s,ills and is ;ell positioned to e+ploit the gro;ing mar,et< Companies li,e Ranba+y, 6oc,hardt and Cheminor ha)e had some success in the mar,et but still ha)e a long ;ay to go< Selection of the right alliance and strategy ;ill be critical for success<

RAJIV R.S.

43

PHARMA -RAJIV

The Approval Process To better understand the appro)al process for generic products, it is important to first understand the *-A drug appro)al process< =sing a number of R&- techni@ues, an inno)ator pharmaceutical company ;ill screen chemical compounds for potential use in treating a specific disease< >nce a promising molecule or chemical compound is disco)ered, it enters the de)elopment phase< There are essentially four phases in the de)elopment process as defined by the =S *-A <The first phase -- preclinical research -in)ol)es laboratory and animal testing of the compound ;hich is primarily aimed at establishing safety and efficacy< $f successful, the inno)ator can then file an $n)estigational Ne; -rug

Application 1$N-2 ;ith the *-A, see,ing appro)al to mo)e the compound into a three phase process of human testing< At the successful completion of lengthy human clinical trials, the inno)ator files a Ne; -rug Application 1N-A2 submission ;ith the *-A see,ing to bring the ne; compound to mar,et< The process re@uired to establish safety and efficacy can ta,e as long as %(%: years, and cost in e+cess of D?(( million< $n order to recapture this in)estment, the inno)ator is typically granted a period of mar,et e+clusi)ity< The generic pharmaceutical company, see,ing to mar,et an e@ui)alent to an inno)ator7s product 1once the mar,et e+clusi)ity on the inno)ator7s product has e+pired2, uses a significantly less costly and faster process, the Abbre)iated Ne; -rug Application
RAJIV R.S.
44

PHARMA -RAJIV

1AN-A2 process< $t is essential to understand that the generic manufacturer relies on the safety and efficacy data supplied by the inno)ator, and only has to pro)e to the *-A that its product is e@ui)alent to the branded product< 6hen processing an AN-A, the *-A ;ai)es the re@uirement for conducting complete clinical studies as safety and efficacy ha)e already been established by the inno)ator company< 3o;e)er, it usually re@uires the generic manufacturer to conduct

bioa)ailability andAor bioe@ui)alence studies of its )ersion of the branded drug< Bioa)ailability studies assess the rate and e+tent of absorption and le)els of concentration of a drug in the blood stream needed to produce a therapeutic effect< Bioe@ui)alence studies compare the bioa)ailability of one drug product ;ith another, in this case the inno)ator7s product< 6hen bioe@ui)alence is established, it indicates that the rate of absorption and the le)els of

concentration of a generic product are substantially e@ui)alent to the branded product< The AN-A process eliminates the lengthy and costly clinical research phase of de)elopment< As a result, generic

pharmaceutical product de)elopment ta,es appro+imately : years< The *-A also re@uires that a company7s manufacturing methods conform to current good manufacturing practices 1c"#!2, as defined in the =<S< Code of *ederal Regulations< The company must follo; the c"#!s in all phases of the manufacturing
RAJIV R.S.
45

PHARMA -RAJIV

process, and must continually monitor compliance and measure @uality control< $f the *-A belie)es that a company is not in compliance ;ith c"#!, it can impose sanctions including initiating an action that can result in the recall of products already sold into the mar,etplace, ;ithholding ne; product appro)als,

dis@ualifying a company from supplying products to federal agencies, or pre)enting a company from e+porting products< <hat are the reDuirements &or &ilin$ an AN!AC At the time of filing an AN-A application, the applicant see,ing appro)al of a particular drug co)ered by an N-A must ma,e one of four certifications about the legal status of patents listed by the N-A holder< They areC the re@uired patent information has not been filed, that the patent has e+pired, that the patent has not e+pired, but ;ill e+pire on a particular date, that the patent is unenforceable, in)alid or ;ill not be infringed by the drug for ;hich the AN-A applicant see,s appro)al 1paragraph $ 2 <hat happens i& there are more than one AN!As &or a particular dru$C $n instances ;here more than one AN-A has been filed on a particular drug, the first filed AN-A may be entitled to %G( day of mar,eting e+clusi)ity follo;ing appro)al against later filed AN-As< $t is usually the case that the first generic company to
RAJIV R.S.
46

PHARMA -RAJIV

mar,et ;ill ac@uire a larger mar,et share< Therefore, an important mar,eting benefit is pro)ided to the first AN-A applicant ;ho is entitled to %G( day mar,eting e+clusi)ity< The M6a+man- 3atch ActM pro)ides this e+clusi)ity pro)ision as an incenti)e for generic firms to in)est in the lengthy and e+pensi)e process of challenging suspect patents that protect inno)ator drug product< This benefit is passed along to the consumer by ha)ing access to high @uality and cost effecti)e drugs<

RAJIV R.S.

47

PHARMA -RAJIV

Anal$esicsE Anti0Pyretics The combined mar,et share of analgesicA anti-pyretic is

estimated to be RsEbn, and it is gro;ing at %?-%FH yoy< Around ?:H of the mar,et are for ethical oral preparations, ;herein sales ha)e been increasing %%-%:H pa< Nearly E(H of the mar,et is dominated by o)er the counter 1>TC2 oral products< The segment is dominated by pharmaceutical #NCs< Smith4line.s Crocin is the leader ;ith %%<:H mar,et share< 3oechst #arion.s No)algin is has recorded a negati)e gro;th of FH in *8&&<#aBor formulations are C

+rand

"anu&acturer

"ar,et shar e 698 3:=

E<E

Growth 9 yoy

Crocin

Smith,line !harma "eoffrey #anners

3=:>
G<(

Anacin

RAJIV R.S.

48

PHARMA -RAJIV

Pain +alms !ain balms ha)e a Rs%<:Fbn mar,et, gro;ing at %(H yoy< $n *8&&, Smith,line.s $ode+ has lost its leadership to ic,s aporub

of !rocter & "amble< All the four brands are in mature stage of their life cycle< Sales promotion, line e+tensions and

ad)ertisements dri)e sales gro;th< The maBor brands are C +rand "anu&acturer "ar,et share 698 :I<G %E<: Growth 9 yoy ::<( ::<(

ic,s aporub !rocter & "amble AmrutanBan AmrutanBan Anal$esic And Anti0Spasmodic

The combined mar,et si5e of analgesics and anti-spasmodic therapeutic segment is estimated to be Rs%<:bn, gro;ing at %G<FHyoy< #aBor formulations in this therapeutic segment are C +rand

"anu&actur er
6oc,hardt $ndoco Remedies

"ar,et share 698 %I<E G<I

Growth 9 yoy :F<( %G<(

Spasmo!ro+y)on Cyclopam

Antacids And Anti0ulcerants

RAJIV R.S.

49

PHARMA -RAJIV

Antacids The domestic mar,et si5e is estimated to be Rs:bn gro;ing G<'H yoy< This therapeutic segment is dominated by

pharmaceutical #NCs< #aBor antacid formulations in solid form are C +rand

"anu&act urer

"ar,et share 698 :E<E

Growth 9 yoy %:<(

-igene

4noll !harma 3imalaya

G<%

1E<F2

Bonnisa n Anti0ulcerants

-rugs

The domestic mar,et si5e is around RsEbn and is gro;ing at %EH yoy< The demand for Rantidine based formulations has declined from Rs%<:bn in *8&G to Rs%<%bn in *8&&< $n the current year, the demand for >mepra5ole based formulation has risen from Rs(<G'bn in *8&G to Rs%bn, registering a gro;th of %?<FH yoy2< "la+o.s Kinetac and Ranba+y.s 3istac 1both are ranitidine based formulations2 are losing mar,et share to -r Reddy.s >me5 and Cadila 3C.s >cid 1both are omepra5ole based formulations2< N!!A has recently done up;ard price re)ision of ranitidine based formulations< The beneficiaries are "la+o, Ranba+y, JB Chemicals and Cadila !harma< +rand

RAJIV R.S.

50

PHARMA -RAJIV

Kinetac

3istac Anti0anaemic The domestic mar,et si5e is estimated to be RsE<:Fbn gro;ing G-%(H yoy< #aBor anti-anaemic 1plain & combination2

formulations are C +rand -e+orange !lus

"anu&acturer *ranco $ndian

Smith,line !harma

"ar,et share 698 %?<G E<%

Growth 9 yoy E<F 1F<(2

*efol-K Anti0dia etes The domestic mar,et si5e is estimated to be Rs:<I'bn gro;ing :FHyoy< >f this, ?(H of the mar,et is for insulin formulations ;herein demand is gro;ing :(Hyoy< The balance I(H of the mar,et comprises of formulations of other anti-diabetic drugs and demand gro;th is :GH yoy< Insulin -ormulations $nsulin based formulations is a Rs%<(Fbn mar,et gro;ing at :(H yoy< 4noll !harma is the mar,et leader ;ith more than FFH of

RAJIV R.S.

51

PHARMA -RAJIV

the mar,et share< >ther players are Torrent !harma and 0ily /illy Ranba+y< Torrent !harma does contract manufacturing 4noll !harma.s formulations< #aBor $nsulin based formulations are C +rand

"anu&a ct ur er
4noll !harma Torrent !harma

"ar, et shar e 698 :F<: I<'

Grow th 9 yoy

3uman #i+tard

:F<( %E<F

#onotard 3uman

Non0insulin -ormulations
Non insulin formulation is a Rs%<IEbn mar,et gro;ing at :'H yoy< 3oechst.s -aonil is the mar,et leader ;ith more than :%H share< #aBor non-insulin formulations are C +rand

"

"ar ,et sha re 698

Gro wth 9 yoy

RAJIV R.S.

52

PHARMA -RAJIV

-aonil

3 oe ch st # ari on Ni ch ol as !ir a m al

:%<:

'<F

E<'

:(<(

0uglucon

Anti0histamine -omestic mar,et si5e is around Rs%<&'bn gro;ing %I<FHyoy< 3oechst.s Avil is the leading brand ;ith %F<'H mar,et share< $n *8&&, 3oechst #arion and Ranba+y has entered into agreement co-mar,et non-sedati)e anti-histamine Allegra and Alti)a

respecti)ely< #aBor formulations are C +rand A)il "anu&acturer 3oechst #arion Rhone !oulenc !henergan "ar,et share 698 %F<' F<E Growth 9 yoy %F<( %:<(

RAJIV R.S.

53

PHARMA -RAJIV

Anti0malarial The domestic anti-malarial formulations mar,et is estimated to be RsGF(mn gro;ing at %(H yoy< $!CA /abs is the mar,et leader ;ith more than E'H share< >ther players are Bayer, /upin /abs and 0 #erc,< #aBor formulations are C +rand /ariago "anu&acturer "ar,et share 698 E'<G ?<% Growth 9 yoy %:<( %(<(

$!CA labs
0-#erc,

0m@uin Anti0Tu erculosis The domestic mar,et si5e for anti-TB formulations is estimated to be RsE<?bn, gro;ing at :<FH yoy< >f this, formulations of Rifampicin alone account for o)er GH and its formulations in combination ;ith other anti-TB drugs account for around I(H of the anti-TB mar,et< Rifampicin is under price control, this has resulted in )ery high -!C> co)erage for the anti-TB segment< Recently N!!A has done up;ards re)ision of Rifampicin based formulations< /upin /abs and No)artis are the main beneficiaries< /upin /abs is the mar,et leader ;ith more than EFH mar,et share< Rifampicin based formulations are losing the mar,et share ;hile combination pac,s 1containing Rifampicin, $sonia5id and !yra5inamide2 are gaining the mar,et share< The maBor anti-TB formulations are as under C

RAJIV R.S.

54

PHARMA -RAJIV

+rand R-Cine+

"anu&acturer
/upin /abs Cadila !harma

"ar,et share 698 %%<G E<:

Growth 9 yoy 1E<F2 1:<F2

#ycobutol Anti0emetic The domestic mar,et si5e is estimated to be Rs%<GFbn gro;ing :(H yoy< >f this, oral formulations ha)e the lion.s share, though some popular brands li,e !erinorm are a)ailable in oral as ;ell as inBectible form< #aBor formulations are C +rand !erinorm "anu&acturer $!CA /abs $ntas Ci5a "ar,et share 698 %:<' '<I Growth 9 yoy %'<F :(<(

Anti0In&ectives Total domestic mar,et for antibiotic formulations is

appro+imately Rs:G<Fbn, gro;ing at %?Hyoy< The maBor subgroups in this segment, their proportion of the total mar,et and their annual gro;th rates are as under<

RAJIV R.S.

55

PHARMA -RAJIV

Type o& anti iotic &ormulations AmpicillinA amo+ycillin

9 total ::<G (<F

Growth 9 yoy %(<( G<F

Streptomycin & comb AmpicillinA ampo+cillin based formulations constitute the largest mar,et ;ith :GH of the total anti-infecti)e mar,et< $n *8&&, Cephalosporin based formulations ha)e registered gro;th rate of :GH yoy< #acrolids 1%&<FH yoy2, !enicillin 1:(H yoy2 and Chloramphenicols 1%G<FH yoy2 are the other fast gro;ing segments amongst anti-infecti)es< Anti-TB segment and

Tetracyclin based formulations gre; by mere by :<FH yoy< Ampicillin, Amo%ycillin @ Clo%acillin -ormulations 1 AmpicillinA amo+y & clo+acillin based formulations is a RsI<Fbn mar,et gro;ing at %(H yoy< $n *8&&, Re+cel.s 1%((H subsidiary of Ranba+y2 #o+ has notched up L % position from =nichem.s Ampo+in< Cipla.s No)omo+ and Ranba+y.s Roscillin ha)e recorded a negati)e gro;th of '<FH and :<FH yoy respecti)ely< Al,em /abs. Cla)am, the fastest gro;ing formulation in this segment has registered gro;th of G(H yoy< #aBor ampicillinA amo+ycillin & clo+acillin formulations are

RAJIV R.S.

56

PHARMA -RAJIV

+rand #o+

"anu&acturer

"ar,et share 698 '<: :<(

Growth 9 yoy :F<( %:<F

Re+cel
Al,em /abs

Broadicillin

RAJIV R.S.

57

PHARMA -RAJIV

Anti0+acterial Anti-bacterial 1@uinolones based formulations2 is a RsF<EFbn mar,et gro;ing at %'<FH yoy< Ranba+y and Cipla are the maBor players ;ith each ha)ing mar,et share of %FH each< Ranba+y.s ,ey brands are Cifran and Kanocin ;hile Cipla.s ,ey brands are Ciplo+ and Norflo+< $n *8&&, -r Reddy.s /ab.s Ciprolet has registered sales gro;th of %EFH yoy and has captured E<EH of the mar,et share< #aBor 9uinolone formulations are C +rand Cifran "anu&acturer Ranba+y Cadila 3C "ar,et share 698 %(<& :<% Growth 9 yoy %G<( %:<F

Ciprodac Cephalosporin Cephalosporin is a RsF<'Fbn mar,et and is gro;ing at :GH yoy< "la+o is the mar,et leader in this segment ;ith o)er :FH of the mar,et share< Ranba+y ran,s :nd ;ith more than :(H mar,et share< $n order to further consolidate the mar,et leadership, both "la+o and for Ranba+y ad)anced has entered into of co-mar,eting cephale+in<

arrangement

dosage

form

Accordingly, Ranba+y ;ill mar,et ne; dosage from as Sporide+ A* and "la+o ;ill e+tend its !he+in brand< The co-mar,eting

RAJIV R.S.

58

PHARMA -RAJIV

arrangement presently co)ers $ndia and Nepal< $n a separate comar,eting arrangement Ranba+y and Cipla ;ill together mar,et cefpodo+ime pro+etil, an ad)anced third generation oral

cephalosporin 1under the brand name Cefopro+ for Cipla and Cepodem for Ranba+y2< #aBor Cephalosporin formulations are C +rand Sporide+

"anu&acturer "ar,et share

698 %(<? %<' Ranba+y 3oechst #arion

Growth 9 yoy %:<F %:<F

>mnata+

RAJIV R.S.

59

PHARMA -RAJIV

"acrolid #acrolid is a RsI<:bn mar,et gro;ing at the rate of %&<FH yoy< $n this segment, Alembic Chemicals is the mar,et leader ;ith more than ?(H of the mar,et share< Althrocin ran,s : nd after !fi5er.s Becosule< >ther players are Abbott /abs and $!CA /abs< #aBor #acrolide formulations are C +rand Althrocin "anu&acturer "ar,et share 698 :&<% E<G Growth 9 yoy '<F %(<(

Alembic
3oechst #arion

Rulide Tetracycline @ !o%ycycline -ormulations Tetracycline and combination based formulations are Rs%<?Fbn mar,et gro;ing at :<FH yoy< $n this segment, =S itamins.

-o+y-% is the mar,et leader< 6hile the other formulations are registering negati)e gro;th 1e+cept for !fi5er.s Terramycin2, -o+y-% has registered a sales gro;th of %&H yoy< #aBor Tetracycline & -o+ycycline formulations are C

RAJIV R.S.

60

PHARMA -RAJIV

+rand -o+y-%

"anu&acturer =S itamin

"ar,et share 698 %E<? '<I

Growth 9 yoy %&<( 1I<(2

3oechst #arion 3ostacyclin e

Trimethoprim @ Sulphametho%aFole Com ination Trimethoprim and sulphametho+a5ole based formulations is a Rs%bn mar,et and gro;ing at ?<FH yoy< $n this segment, "la+o is the leader ;ith more than ?FH mar,et share< >nly Septran has registered positi)e sales gro;th of %:H yoy ;hile Bactrim and >riprim registered negati)e gro;th of :<FH and '<FH respecti)ely< #aBor TrimethoprimQSulphametho+a5ole

combination formulations are C +rand

"anu&actur er
"la+o Cadila 3C

"ar,et share 698 ?(<( %(<:

Growth 9 yoy %:<( 1'<F2

Septran >riprim Penicillin

!enicillin based formulations are RsI:Fmn mar,et gro;ing at :(H yoy< $n this segment Ambalal Sarabhai is the mar,et leader< Though !enicillin based formulations ha)e registered sales gro;th of :(H yoy but maBor brands namely !entids and !enidure ha)e registered negati)e gro;th of :<FH and %:<FH respecti)ely< #aBor !enicillin formulations are C
RAJIV R.S.
61

PHARMA -RAJIV

+rand

"anu&acturer Sarabhai 6yeth /ederle

"ar,et share 698 EF<? %I<&

Growth 9 yoy 1:<F2 1%:<F2

!entids
!enidure

Streptomycin #aBor Streptomycin formulations are C +rand

"anu&actur er
Sarabhai

"ar,et share 698 %((<(

Growth 9 yoy
%:<(

Ambistrin

Other Anti iotics #aBor other antibiotics formulations are C +rand

"anu&actur er

"ar,et share 698 ::<F

Growth 9 yoy EF<(

#i,acin

Aristo !harma

"enticyn

Nicholas !iramal

%(<?

:F<(

Anti0Parasitic @ Anti0-un$al
The domestic mar,et si5e for anti-proto5oal, anti-helmintic and anti-fungal formulations put together is estimated to be RsF<Ibn< Anti-proto5oal and anti-fungal therapeutic segments are gro;ing
62

RAJIV R.S.

PHARMA -RAJIV

at more than :(H yoy ;hile anti-helmintic therapeutic segment is gro;ing at '<FHyoy< Anti-malarial segment is not included in anti-helmintic therapeutic segment< !roportion of each sub-group and its gro;th rate are as under Therapeutic se$ments Antiproto5oal Anti-fungal "ar,et share 698 %<& (<& Growth 9 yoy :%<F E(<(

Anti0protoFoal
Anti-proto5oal therapeutic segment is a Rs:<Fbn mar,et gro;ing at :%<FH yoy< Cipla and Ranba+y are the mar,et leaders ;ith more than :(H mar,et share together< $n *8&&, Ranba+y.s Cifran CT and Cipla.s Ciplo+ TK ;ere the top brands gro;ing at EFH and ?(H yoy respecti)ely< Smith,line Beecham

!harmaceuticals is the loser in this segment as its brand -ependal-# has registered a negati)e gro;th of ::H yoy< #aBor anti-proto5oal formulations are C

RAJIV R.S.

63

PHARMA -RAJIV

+rand Cifran-CT

"anu&acturer

"ar,et share 698 ?<: E<(

Growth 9 yoy EF<( E<F

Ranba+y
Rhone !oulenc

*lagyl

Anti0helmintic
Anti-helmintic therapeutic segment 1e+cluding anti-malarials2 is a Rs%<&bn mar,et is gro;ing at '<FH yoy< $n anti-helmintic formulations Smith,line Beecham.s Kental is the mar,et leader ;ith more than :FH share< Kental is Rs%'Fmn brand gro;ing at %(H yoy< Kental is gro;ing at a much slo;er pace than Cipla.s #ebe+ 1:(H yoy2, "la+o.s !ipera5ine Citratre 1:FH yoy2 and Al,em.s No;orm 1:?H yoy2< #aBor anti-helmintic formulations are C

RAJIV R.S.

64

PHARMA -RAJIV

+rand

"anu&acture r
Smith,line !harma Al,em /abs

"ar,et share 698 :I<E ?<F

Growth 9 yoy %(<( :?<(

Kentel

No;orm Anti0&un$al Anti-fungal therapeutic segment is a Rs%<:Ebn mar,et gro;ing at E(H yoy< "la+o.s -ermonorm, a RsF:mn brand is the mar,et leader but gro;ing at FH yoy 1much lo;er than segment gro;th of E(H2 ;hile Cipla.s *orcan ;ith mar,et share of &<%H is gro;ing at EFH yoy< #aBor anti-fungal formulations are C +rand

"anu&acture r
"la+o Bayer

"ar,et share 698 &<F I<?

Growth 9 yoy F<( %F<(

-ermonorm

Canesten

Cardiac Care The domestic mar,et si5e for cardiac care formulations, including diuretics, )asodilators etc is estimated to be Rs'<'bn mar,et

RAJIV R.S.

65

PHARMA -RAJIV

gro;ing at %?-%FHyoy< >f this the proportion of )arious maBor sub-groups and their gro;th rates are as under C Therapeutic su 0$roup Calcium Channel Bloc,ers 9 o& se$ment :E<: (<% Growth 9 yoy %E<( EF<(

>ther products

cardio)ascular

Calcium Channel +loc,er Calcium Channel Bloc,er is a Rs%<Gbn mar,et gro;ing at %EH yoy< $t contributes more than :EH to cardiac care therapeutic segment< Torrent !harma.s -il5em is the mar,et leader but it registered negati)e gro;th of :<FH in *8&&< -r Reddy.s Stamlo is gro;ing at :FH almost double the gro;th of therapeutic subgroup< Stamlo is e+pected to become mar,et leader in *8:(((< #aBor Calcium Channel Bloc,er formulations are C +rand -il5em "anu&acturer Torrent !harma Cadila 3C -epin +eta +loc,er "ar,et share 698 %:<: I<' Growth 9 yoy 1:<F2 '<F

RAJIV R.S.

66

PHARMA -RAJIV

Beta bloc,er is a Rs%<%Fbn mar,et gro;ing at &<FH yoy< $t contributes almost %FH to cardiac care therapeutic segment< 4opran.s Aten is the mar,et leader ;ith :(H share gro;ing at %F<FH yoy< #aBor RBeta Bloc,er. formulations are C +rand Aten Tenormin "anu&acture r 4opran $C$ "ar,et share 698 :(<( %(<? Growth 9 yoy %F<F I<F

RAJIV R.S.

67

PHARMA -RAJIV

ACE Inhi itor AC0 inhibitor is a Rs%<%bn mar,et gro;ing at %F-%IH yoy< Cadila !harma.s 0n)as is the leader ;ith :FH mar,et share< #aBor RAC0 $nhibitor. formulations are C +rand 0n)as /istril

"anu&acturer
Cadila !harma Torrent !harma

"ar,et share 698 :F<% %(<'

Growth 9 yoy %F<( %?<(

Anti0an$inal Anti-anginal is a Rs%bn mar,et gro;ing at %?H yoy< Sun !harma.s #onotrate is the leader ;ith more than %IH mar,et share< #aBor anti-anginal formulations are C +rand "anu&acturer "ar,et share 698 %I<: :<F

Growth 9 yoy
%:<( :F<(

#onotrate $sordil !iuretic

Sun !harma 6yeth /ederle

-iuretic is RsF:Fmn mar,et and is gro;ing at %?H yoy< 3oechst #arion and Smith,line !harma are the maBor players ha)ing mar,et share of more than ?(H< #aBor diuretic formulations areC

+rand

"anu&acturer

"ar,et share 698

Growth 9 yoy

RAJIV R.S.

68

PHARMA -RAJIV

/asi+ /asilactone

3oechst #arion 3oechst #arion

%?<E %E<E

I<F :(<(

CNS @ Psychiatric Therapy The domestic mar,et si5e is estimated to be Rs?<GFbn, gro;ing at %(H yoy< The maBor sub-groups in this segment 1as per therapeutic effecti)eness2, their proportion of the total mar,et and annual gro;th rates are as under C Su $roup 9 o& total E&<: ?<I Anti-!ar,insons Anti0epileptic The domestic mar,et si5e is estimated to be Rs%<?Ebn, gro;ing at %%<FH yoy< No)artis. Tegretol is the leading brand ;ith more thab %IH mar,et share< #aBor anti-epileptic formulations are C Growth 9 yoy %(<( %(<(

Sedati)es & Tran@uili5ers and 3ypnotics

RAJIV R.S.

69

PHARMA -RAJIV

+rand Tegretol

"anu&acturer No)artis Rhone !oulenc

"ar,et share 698 %I<G '<'

Growth 9 yoy '<F %'<F

"ardenal Anti0depressant The domestic mar,et si5e is estimated to be Rs%<Ebn gro;ing at '<FH yoy< #aBor anti-depressant formulations are C +rand "anu&acturer "ar,et share 698 G<' :<E Growth 9 yoy EF<( %F<(

Nootropil

=CB Sun !harma

/ithosun Sedatives @ TranDuiliFers The domestic formulation mar,et is estimated to be Rs%<&bn gro;ing at %(H yoy< This segment is dominated by domestic players< #aBor Sedati)es & Tran@uili5ers and 3ypnotic

formulations are C +rand Alpra+ "anu&acturer Torrent !harma Cipla "ar,et share 698 %(<F F<E Growth 9 yoy '<F %F<(

RAJIV R.S.

70

PHARMA -RAJIV

Restyl Anti0Par,inson The domestic mar,et is estimated to be Rs::Fbn gro;ing at %(H yoy< #aBor anti-!ar,inson.s formulations are C +rand !acitane "anu&acturer 6yeth /ederle #erind Sinemet Gynaecolo$icals The domestic gyneac formulations mar,et is estimated to be RsEbn gro;ing %IH yoy< >f this, hormonesA contracepti)es comprise 'IH 1;ith sub-groups of formulations as per the hormone2< >+ytocics ma,e up :(H of this mar,et< Pro$estro$ens The domestic mar,et is estimated to be Rs&F(mn gro;ing at %?H yoy< This segment is dominated by #NCs but domestic players namely Serum $nternational and Jagsonpal are gaining mar,et share< #aBor !rogestrogens and their combination formulations are C +rand "anu&actu rer "ar, et share 698 Growth 9 yoy "ar,et share 698 ::<: ?<( Growth 9 yoy :(<( 1%F<(2

RAJIV R.S.

71

PHARMA -RAJIV

!rimolutN

"erman Remedies "erman Remedies

%G<& %E<:

%:<F :<F

!roluton )ormona l Contrace ptive The domestic mar,et is estimated to be RsE((mn gro;ing at %:H yoy< This segment is dominate d by #NCs namely 6yeth /ederle and "erman Remedies< #aBor hormonal contracep ti)e formulatio ns are C

RAJIV R.S.

72

PHARMA -RAJIV

+rand

" a r , e t s h a r e 6 9 8

-uoluton

% E < E

RAJIV R.S.

73

PHARMA -RAJIV

Andro$e ns @ Com ina tions The domestic mar,et is estimated to be Rs::Fmn gro;ing at E(H yoy< #aBor Androgen s and their combinati on formulatio ns are C +rand " a n u & a c t u r e r "ar ,et shar e 698 Gr o wt h 9 yo y

RAJIV R.S.

74

PHARMA -RAJIV

Testo)iron

" e r m a n R e m e d i e s $ n f a r $ n d i a

%F<I

:<F

Sustanon

%E<E

'<F

"a#or +rands Becosules from !fi5er and Althrocin from Alembic Chemicals continue to hold L% and L: position respecti)ely< $n *8&&, Ro+id 1Alembic Chemicals2, #o+ 1Re+cel !harma2, Core+ 1!fi5er2 and Ta+im 1Al,em /abs2 are the maBor gainers registering gro;th of o)er :(H yoy< Kinetac 1"la+o2, Brufen 14noll !harma2,

Combiflam 13oechst #arion2 are the maBor losers registering a negati)e gro;th of %?<:H, %(<GH and I<EH yoy respecti)ely< Top G> +rands Are 1 Ran, -ormulatio ns Company

Grow t
75

RAJIV R.S.

PHARMA -RAJIV

h -*44
-*45 ?E Ro+id Alembic Chemical 9 yoy :?<I

E( Source: Scrip "a#or Players "la+o-6ellcome combine continue to maintain the L% ran, despite losing the o)erall mar,et share in *8&&< -omestic companies namely 6oc,hardt, -r Reddy.s /abs, Nicholas

!iramal, Kydus Cadila and Al,em /abs ha)e impro)ed their mar,et share significantly< 6oc,hardt has impro)ed its mar,et

RAJIV R.S.

76

PHARMA -RAJIV

share mainly due to ac@uisition of #erind besides %F ne; product launches< -r Reddy.s /abs has impro)ed its ran, from :? in *8&G to :( in *8&& on account of brand ac@uisitions from -olphin /abs and Natco !harma< Nicholas !iramal has impro)ed its mar,et share from %<GH in *8&G to :<%H in *8&&, a Bump of %F<IH yoy, mainly due to increased focus on formulation business< Amongst domestic players, Torrent !harma ;as the maBor loser< !harmaceutical #NC =S 1earlier =S itamins2 is the maBor

gainer and has impro)ed its share from (<&H in *8&G to %<?H in *8&& 1a Bump of more than FIH yoy2< #ost of the #NCs ha)e lost their o)erall mar,et share in the domestic formulation mar,et due to presence of matured products in their portfolio and reluctance of parent company to introduce ne; products from their global product portfolio< #ar,eting tie-upsC -omestic players and #NCs ha)e entered into mar,eting arrangements to increase mar,et penetration and further strengthen positions in respecti)e therapeutic segments< Ranba+y has mar,eting tie-ups ;ith Cipla, "la+o and 3oechst #arion for products in specific therapeutic segment< Similarly 3oechst #arion has tie-ups ;ith Nicholas !iramal<

RAJIV R.S.

77

PHARMA -RAJIV

Top G> Players Are1

Ran,

"a#or players

"ar,et share 698 -*44 -*45

Growth

-*4

-*45

9 yoy

:&

*-C

%<(

%<(

1E<(2

E( NSAI!s 6Non0Steroidal Anti0In&lammatory !ru$s8 -omestic mar,et for NSA$-sA Anti-rheumatism formulations is estimated to be Rs'<%bn, gro;ing at %?-%FHyoy< $t includes

RAJIV R.S.

78

PHARMA -RAJIV

topical formulations subsegment,;hich accounts for %?H of the mar,et, gro;ing at %%H yoy< $n systemic formulations mar,et, the maBor drug-;ise sub-groups are $buprofen, -iclofenac Sodium and !iro+icam brands< Systemic NSAI!s Systemic NSA$-s is a RsI<%Ebn mar,et gro;ing at %FH yoy< This segment is dominated by #NCs but maBor domestic players such as Cipla, -r Reddy.s /abs, !anacea are gradually increasing their presence< #aBor systemic NSA$-s formulations are C +rand

"anu&a ctu rer

No)artis Aristo

"ar,et share 698

Growth 9 yoy

o)era n

G<F %<G

:(<( 1F<(2

*le+on

RAJIV R.S.

79

PHARMA -RAJIV

Topica l NSAI! s Topical NSA$s is a Rs&'F mn mar,et gro;in g at %:H yoy< #aBor topical NSA$s formul ations areC +rand "an u&act urer " a r , e t s h a r e 6 9 8 olini Cross lands % : < G

RAJIV R.S.

80

PHARMA -RAJIV

Nutrients @ "ineral Supplements The domestic mar,et si5e for calcium supplements is estimated to be Rs%<:bn gro;ing at GH yoy< The domestic mar,et si5e for protein supplements is estimated to be Rs%<Ebn gro;ing %(H yoy< $n case of other general nutrients, the main brand ;ith o)er &EH mar,et share is 3ein5.s "lucon-- ;ith sales of RsF((mn, gro;ing around %:<FH yoy< #aBor calcium formulations are C +rand "anu&act urer "ar,et share 698 :%<' Growth 9 yoy

>stocalciu m #aBor protein formulatio ns are C +rand " a n u & a c t u r e r

"la+o

:<F

" ar , et s h ar e 6 9 8

RAJIV R.S.

81

PHARMA -RAJIV

"R-

C a d il a ! h a r m a Sector1

G< G

Pharmaceuticals

Trend

Analysis

O&

!omestic

-ormulations "ar,et The Rs%E(bn domestic formulations mar,et is gro;ing at %FH yoy< The anti-infecti)e therapeutic segment 1including antibacterial and anti-TB therapeutic segment2 ;hich commands mar,et share of ::H has registered gro;th of %E<EH yoy< Cephalosporins and macrolids 1sub segment of anti-infecti)es2 are gro;ing at :GH and %&<FH yoy respecti)ely< Cardiac care at L: is gro;ing at %IH yoy< itamins, ;hich ;itnessed lo;er

gro;th of I-GH in *8&G, ha)e registered sales gro;th of %?H yoy in *8&&< Amongst maBor therapeutic segments, )accines and anti-diabetic therapeutic segment is fastest gro;ing at :FH yoy each ;hile antacids and en5ymes are gro;ing at G<FH yoy each< !erformance of each therapeutic segment is described in detail in the latter part of the report< "a#or Therapeutic Se$ments Are1 Therapeutic se$ments Anti-infecti)es
RAJIV R.S.

Sales 6Rs mn8 :G,FF(<(

"ar,et share 698 ::<(

Growth 9 yoy %E<E

82

PHARMA -RAJIV

GF(<(

(<'

%(<(

Anti-malarial Respiratory System Ailments Cou$h @ cold This segment is a RsI<'bn mar,et gro;ing at %:H yoy< >f this o)er 'EH comprises of cough remedies and the balance around :'H is accounted by cold medication< Cough medication C This is largely an ethical segment ;ith syrups being the dominant dosage form< There are multiple players - both $ndian and #NCs< 3o;e)er, all the E top brands belong to #NCs, as depicted belo;< >ral medication in the form of lo5enges is a Rs?((mn mar,et, gro;ing at :(Hyoy< 3erein too the maBor brands are all o;ned by #NCs< #aBor ethical cough syrups are C
83

RAJIV R.S.

PHARMA -RAJIV

+rand Core+

"anu&acturer !fi5er Alembic

"ar,et share 698 %:<? :<:

Growth 9 yoy ::<( 1%(<(2

"lycodin Terp)asa,a Cold remedies C This %<Gbn mar,et segment, gro;ing %:<FH yoy, comprises largely of anti-histamine products that aim to relie)e allergic colds< Around 'EH of the mar,et is for oral solids and the rest is for syrups< There is also a Rs?((mn mar,et for nasal decongestants gro;ing %F-%IHyoy, ;herein No)artis.s >tri)in is the dominant brand ;ith a E:<FH mar,et share< The L: brand is 0-#erc,.s Nasi)ion< The >TC products segment predominantly comprises of !&".s ic,s aporub, an anti-cold balm that has a

RsEF(mn mar,et gro;ing at :FHyoy< #aBor ethical brands prescribed for colds are C +rand ic,s F(( "anu&acturer "ar,et share 698 '<& Growth 9 yoy ::<(

Action !rocter

&

"amble
Alembic I<% %:<(

6i,oryl

RAJIV R.S.

84

PHARMA -RAJIV

Anti0asthmatics Anti-asthmatics 1or Bronchodilators2 ha)e a Rs:<'bn mar,et, gro;ing at %?-%FH yoy< >f this around E(H of the mar,et is for inhalants 1ie aerosol type of dosage form2 ;hich is ;itnessing around :F-:'H yoy gro;th< 3alf the mar,et is for oral solids 1ha)ing G-%(H yoy gro;th2 and the rest for li@uid ie syrup form of medication 1ha)ing %E-%FH yoy gro;th2< #aBor anti-asthmatic formulations are C +rand -eriphyllin "anu&acturer "erman Remedies *ranco $ndian "ar,et share 698 %%<? ?<F Growth 9 yoy %?<( %G<(

"rilinctus-B# "erman Remedies -eriphyllin is the leader ;ith %%<?H mar,et share< Cipla is the mar,et leader ;ith four brands contributing more than :FH of anti-asthmatic segment< Cipla also has other inhalant brands and controls almost I(H of the RsG((mn antiasthmatic inhalants mar,et< /itamins The domestic mar,et si5e for )itamin formulations is estimated to be Rs'<Ebn and it is gro;ing %?-%FH yoy< The largest subsegment is itamin B types 1plain, comple+ or ;ith itamin C2,

;hich o)erall accounts for around I(H of the )itamins mar,et< >f this, demand for C
RAJIV R.S.
85

PHARMA -RAJIV

itamin B plain types 1%E<IH2 gro;ing FHyoy< itamin B comple+ ;ithout %(Hyoy< itamin C 1E(H2 gro;ing

itamin B comple+ plus

itamin C 1:FH2 gro;ing 'Hyoy<

The maBor brands in the abo)e E sub-groups are detailed belo;< 6ithin the itamin B comple+ 1;ithout itamin C2 subsegment,

formulations in combination ;ith Kinc ha)e a RsGF(mn mar,et is notching high gro;th of around EFHyoy< 3ere, Smith4line Beecham.s Ke)it has a EFH mar,et share, follo;ed by American Remedies. Beco5inc ;ith %EH mar,et share< itamin C 1;ith

minerals2 formulations ha)e a mar,et of Rs:'Fmn gro;ing at :(H yoy< 3ere, "la+o.s Celin is the leader ;ith ?FH mar,et share and gro;ing at %(H yoy< itamin 0 formulations ha)e a

mar,et of RsI((mn, gro;ing at G-%(H yoy< 0 #erc,.s 0)ion has a stronghold in the mar,et ;ith IFH mar,et share< /itamin + Plain itamin B plain types based formulations is Rs%bn mar,et and is gro;ing at FH yoy< 0 #erc,.s Neurobion is the leading formulation ;ith EIH mar,et share< #aBor formulations in itamin B plain types are C +rand "anu&actu rer 0 #erc, /upin /abs "ar,et share 698 EI<( %%<F Growth 9 yoy

Neurobion >ptineuron

F<( '<F

RAJIV R.S.

86

PHARMA -RAJIV

/itamin + Com ple% <ith out /ita min C

itamin comple+ ;ithout itamin based formulatio ns is a C B

Rs:<:bn mar,et gro;ing at %(H #aBor formulatio ns itamin comple+ ;ithout

RAJIV R.S.
87

yoy<

in B

PHARMA -RAJIV

+rand

"

G r o w t h 9 y o y

!olybion

0 # e r c , " l a + o

% E < F

Comple+ B

: ( < (

/itamin + Comple% <ith /itamin C

itamin B comple+ ;ith )itamin C based formulations is Rs%<Gbn mar,et gro;ing at I<FH yoy< !fi5er.s Becosules is the mar,et leader ;ith more than ??H mar,et share< #aBor formulations in itamin B comple+ ;ith it C types are C

RAJIV R.S.

88

PHARMA -RAJIV

+rand

" a r , e t s h a r e 6 9 8 ? ? < ? I < %

Becosules

Surbe+ T

RAJIV R.S.

89

PHARMA -RAJIV

Summary
This section gi)es o)er)ie; of the pharmaceutical sector< $t co)ers An introduction o& the structure o& the industry: 6rite-up about the importance of research & patents in this sector ;orld;ide, difference bet;een basic and process R&-, the anomalies in $ndia and changes imminent under 6T>< The global scenario including industry si5e, gro;th, regional mar,et shares, therapeutic segmentation, maBor players and brands< $t also pro)ides details about ho; managed healthcare ;or,s, its repercussions on drug prices and opportunities in the =S generics mar,et< The $ndian scenario gi)es the historical bac,drop, present status, gro;th proBections, changing strategies in the face of 6T>, e+port opportunities and future prospects< A detailed co)erage of -!C> 1-rug !rice Control >rder2, its e)olution since %&'(, present status, recent drug policy,

co)erage under -!C> .&F, drugs under price control, their notified prices and maBor formulations<

RAJIV R.S.

90

PHARMA -RAJIV

Imports $ndia.s pharmaceuticals imports 1including bul, drugs,

formulations, intermediatiates, chemicals, sol)ents etc2 are to the tune of RsE%<Ebn< $mports ha)e registered a CA"R of nearly :EH in the past F years< $mports of formulations ha)e increased significantly in the past F years registering CA"R of E:<&H in the past F years< $n *8&& import of formulations gre; by :F<FH yoy< $mport of bul, drugs ha)e slo;ed do;n in the past :-E years mainly due to t;o reasons P firstly there is o)er capacity in the domestic mar,et and secondly the @uality of bul, drugs manufactured by the local manufacturers ha)e impro)ed

significantly and they act as import substitute for #NC.s re@uirements< *ear +ul, !ru$s -ormulati ons Intermediates, Chemicals @ others (<%I I<'( Total 6Rs n8

%&G(-G%

(<G' %&<%G

(<%( F<?(

%<%E E%<:G

RAJIV R.S.

91

PHARMA -RAJIV

%&&G-&& Source C >!!$

E%ports
$ndia.s pharmaceutical e+ports are to the tune of RsFE<'bn, of ;hich formulations contribute nearly F'H and the rest ?EH comes from bul, drugs< $n *8&& e+ports gre; by F<IH yoy< *ormulations e+port declined by &<%H yoy ;hile bul, drugs e+port Bumped up by EE<&H yoy< 0rst;hile =SSR ;as a maBor mar,et for $ndian formulations, but its disintegration ad)ersely affected company. e+ports in %&&%-&:< Again the economic crisis in Russia depressed the e+port of formulations in %&&&< >)erall pharma e+ports ha)e registered a CA"R of :?H in the past F years< This is because lo; domestic margins on account of competiti)e pressures and -!C>, led more players to focus on e+port mar,ets< $n e+ports, domestic companies ha)e a E pronged ad)antage o)er #NCsC !rocess patents gi)e freedom to ma,e #NCs patented products, thus enabling ;ide therapeutic reach< Strong process R&- and lo; manufacturing costs< No restrictions on e+port mar,ets by parent.s o)erseas )entures< *ear -ormulati ons (<? 9 o& total Rs n 1'I2 +ul, !ru$s (<% 9 o& total Rs n 1:?2 Tota Rs nl (<F

%&G(-G%

RAJIV R.S.

92

PHARMA -RAJIV

E(<?

1F'2

:E<E

1?E2

FE<'

%&&G-&& Source C >!!$

Strate$ies O& !omestic Players

#ost of the domestic companies are e+panding the therapeutic reach through ne; product launches in the high margin segment, thus enhancing the product portfolio 1proper bas,et of products helps in con)incing the medical fraternity2 and increasing the critical mass< in $ncreased the focus on prescription through sales and

acceptance

medical

fraternity

increased

a;areness and )isibility< $ncreasing the mar,et penetration through enhanced distribution channel< This ;ill both increase the geographical reach in the domestic mar,et and ;ill facilitate licensing of products from #NCs in the post product patent regime< #ost of these companies ha)e already upgraded the

manufacturing facility and ha)e appro)al or are in the process of

RAJIV R.S.
93

PHARMA -RAJIV

getting appro)al from =S*-A, =4#CA and other international agencies< This is the basic re@uirement for access to the high margin but highly regulated de)eloped mar,et of 0urope and =S< >n the bac, of state of the art manufacturing facilities the companies are pursuing contract manufacturing A global sourcing base for supply of bul, drugsA intermediates for multinational corporations< "etting a brea,through in area of contract

manufacturing ;ill help in increasing global acceptance in terms of @uality and credibility in the e+port mar,et< The companies are setting up subsidiary abroad or strategic alliances to e+ploit the tremendous opportunity in the generics mar,et arising out in the ne+t F to %( years< They ha)e started applying for drug master file A product registration A abbre)iated ne; drug application 1AN-As2 ;orld;ide< The medium term obBecti)e is to focus on process engineering of products going off patent in ne+t F-%( years, ;hich ;ill help in tapping the emerging generics mar,et in the ne+t F-%( years< At the same time R&- ;ould also facilitate in ne; product launches in the domestic mar,et in order to ha)e a stronger product portfolio< The long-term obBecti)e ;ill be to enter into higher platform of biotechnology and drug deli)ery systems<

"NCs vs 'ocal Players

>)erall, the pharma #NCs are at a disad)antage compared to local players, due to C

RAJIV R.S.

94

PHARMA -RAJIV

/imitation to parent company.s portfolio and lac, of freedom to re)erse engineer any other #NC.s products< 3igher -!C> co)erage due to a more mature product range< !arent company.s reluctance to launch ne; products due to absence of patent protection and threat of process piracy and compulsion to price the product lo;er in $ndia compared to other countries< /ac, of e+port opportunities due to parent.s global presence< 3igher cost of manufacture due to parent company.s insistence on stricter compliance of "#! 1"ood manufacturing !ractices2<

-actors A&&ectin$ Pro&ita ility

The $ndian pharmaceutical industry is highly regulated< The "o)ernment controls prices of a large number of bul, drugs and formulations< !rofit margins of players )ary ;idely in both domestic and e+port sales due to many factors, these are mentioned belo;C $n the domestic arena, profitability depends onC !resence in large, high gro;th therapeutic areas eg antibiotics, cardiac care, NSA$-s etc< #anagement foresight to select ne; high potential molecules for launch in $ndia< Re)erse engineering capability to pioneer ne; processes< -!C> co)erage 1ne; launches help reduce proportion of

products under -!C>2<

95

RAJIV R.S.

PHARMA -RAJIV

Competition from other players< Bac,;ard integration into bul, drugs< 0stablished trac, record of product @uality< *ranchise among doctors< -omestic sales force 1#edical Representati)es ie #Rs2 strength< -istribution net;or, in $ndia< 0+port prospects are lin,ed to C *-A, =SAA #CA, =4 appro)al for plants< #ar,eting tie-up ;ith o)erseas pharmaceuticals companies< Tapping the high potential =S generics mar,et< -e)elopment of products ;hich ha)e recently gone off-patent or ;hich are scheduled to go off-patent in near future< =nder-patent product e+ports to other de)elopingA third ;orld countries ;ithout strict patent regulation< *ranchise manufacturing of formulations for o)erseas pharma #NCs< >;n mar,eting net;or, in other countries to de)elop brand e@uity for formulations<

RAJIV R.S.

96

PHARMA -RAJIV

-uture Prospects As per 6T>, from the year :((FAA-, $ndia ;ill grant product patent recognition to all ne; chemical entities 1NC0s2 ie bul, drugs de)eloped then on;ards< This lea)es another F years of #NCs research output open to process piracy< But, long-term prospects for #NCs are good< The pre-6T> and post-6T> scenarios are e+pected to be as under C !re-6T> C The transition phase in preparation of 6T> has commenced< 0stablished local pharma maBors ;ill try to corner a larger part of the domestic formulations mar,et prior to aggressi)e product launches by #NCs post-6T>< To;ards this end, these players are e+pediting the launch of ne; products and also loo,ing at brand ac@uisition opportunities from other relati)ely smaller players< The latter, unable to sustain the stiff local competition, ;ill either close do;n or be ta,en o)er by larger companies< >)erall, the currently fragmented industry ;ill consolidate< The #NCs ha)e started strengthening their ran,s< #ost ha)e already restructured their operations and focussed on the pharma business< !arent companies are re-assessing $ndia.s mar,et potential and ha)e accordingly increased sta,es in e+isting )entures or set up ne; subsidiaries< !ost 6T> C #NCs ;ill be able to freely introduce top of the line, ne; products ie those patented after :((FAA- in the domestic mar,et< 3o;e)er, these are e+pected to be priced at a significant premium in line ;ith the #NCs global policy of earning returns on their R&- in)estment< So, ;ithin a therapeutic segment, the
RAJIV R.S.
97

PHARMA -RAJIV

masses ;ill still continue to resort to the older, lesser efficient and cheaper medicines< Thus, ne; launches by #NCs ;ill be high margin, but lo; )olume products and these ;ill be mostly imported from o)erseas bases and only mar,eted in $ndia< #NCs, ;hich do not ha)e a base in $ndia, ;ill enter into tie-ups ;ith local players to license their ne; products< /ocal players ;ill continue to ma,e and mar,et, in $ndia, the popular generics and also those pre-6T> products, ;hich may still be under, patent o)erseas< They ;ill ta,e up franchise manufacturing and

mar,eting for o)erseas #NCs< /ocal players may also enter into research tie-ups ;ith #NCs to le)erage on their relati)ely lo;cost, efficient s,ill base of trained pharmacists and chemists<

Inter Country Comparison +asic Indicators 0 344B

Country Population 6mn8 GNP Per Capita (S 7 Avera$e annual $rowth rate 698 E<:

$ndia

&I% :IG

E&( :G'?(

=nited States 'i&e E%pectancy @ Adult Illiteracy

RAJIV R.S.
98

PHARMA -RAJIV

Country

'i&e E%pectancy at +irth 6*ears8 344H

Adult Illiteracy rate 9 344I "ales S -emales S

"ales
'?

-emales G(

=nited States *Illiteracy is less than 5%

RAJIV R.S.

99

PHARMA -RAJIV

)ealth Indicators Country Crude +irth Rate 6per 3>>> population8 34B> %' 344I %F Crude !eath Rate 6per 3>>> population8 34B> & 344I & In&ant "ortality Rate 6per 3>>> live irth 8 345> %E 344H '

=nited States

RAJIV R.S.

100

PHARMA -RAJIV

Annual !ru$ E%penditure Per Capita Country Japan E%penditure 6(S 78 ?%: :

#o5ambi@ue

RAJIV R.S.

101

PHARMA -RAJIV

!omestic "ar,et The domestic pharmaceuticals industry output e+ceeds Rs%'(bn, ;hich accounts for merely %<EH of the global pharmaceutical sector< >f this formulations account for G%<FH and %G<FH is bul, drugs< $n *8&& e+ports ;as at RsFE<'bn and imports stood at RsE%<Ebn< %&IF-II 1Rs mn2 Capital Investment E( :I(( %?(( %&&G-&& 1Rs mn2 :%F((

E%penditur e
Source : OPPI The $ndian !harmaceutical sector is highly fragmented ;ith more than :(,((( registered units< $t has increased drastically in the last t;o decades< The leading :F( pharmaceutical companies control '(H of the mar,et ;ith mar,et leader ha)ing nearly 'H of the mar,et share< $t has become e+tremely competiti)e industry mainly due to lo;er affordability, fragmented mar,et ;ith se)ere price competition and go)ernment price control< *ear J o& units

RAJIV R.S.

102

PHARMA -RAJIV

%&I&-'(

:,:F' :(,(FE

%&&G-&& Source : OPPI >)er the years the $ndian !harmaceutical $ndustry has e)ol)ed around the opportunities presented in the regulated

en)ironmentC /ac, of product patent C The $ndian !atents Act %&'( allo;ed the $ndian companies to re)erse engineer the patented molecules and launch it in the domestic mar,et< !rice ceiling under -!C> limited the margins and shifted the focus to cost control< *0RA led to reduced #NC e+posure in $ndia< Small-scale industry 1SS$2 e+emptions led to proliferation of small formulation manufacturers and lo; cost drug

manufacturers< Conse@uently the capital in)estment has also increased o)er the years, especially in the last t;o decades< 8ear %&'E Rs bn :<E :%<F

RAJIV R.S.

103

PHARMA -RAJIV

%&&G Source : OPPI Bul, drugs C >)er I(H of $ndia.s bul, drugs production is e+ported< The balance is sold locally to other formulators< 3o;e)er, many of the #NCs affiliatesA subsidiaries in $ndia import bul, drugs from the parent company and formulate it for local mar,ets< Also, local players ;ho e+port formulations a)ail of duty free imports of bul, drugs< 0+ports are mainly to de)eloping countries in case of under patent drugs and to the de)eloped nations in case of generics< $n *8&&, e+ports stood at RsFE<'bn ;hile import ;as at RsE%<Ebn<

Production0 +ul, !ru$s

*ear %&G(-G%

Rs
:<?

E%<F

RAJIV R.S.

104

PHARMA -RAJIV

%&&G-&& Source : OPPI *ormulations C #ore than GFH of the formulation production in the country is sold in the domestic mar,et< $ndia is largely self sufficient in case of formulations< Some life sa)ing, ne; generation under-patent formulations continue to be imported, especially by #NCs, ;hich then mar,et them in $ndia< >)erall, the si5e of the domestic formulations mar,et is around Rs%E(bn and it is gro;ing at %(H pa< *ormulation e+ports are largely to de)eloping nations li,e China, South Africa, C$S etc<

Production0 -ormulation
*ear %&G(-G%

Rs

%:<( %EG<G

%&&G-&& !ru$s Price Control Order 6!PCO8

RAJIV R.S.

105

PHARMA -RAJIV

This chapter discusses the e)olution of -!C>, its latest re)ised form of Jan .&F, the drugs under price control and brandsAplayers affected<

Introduction
-!C> controls the domestic prices of maBor bul, drugs and their formulations ;ith an aim to pro)ide patients ;ith medicines at affordable prices< -!C> ascertains, as per -rug !olicy guidelines, the bul, drugs 1and their formulations2 to be ,ept under price control< =nder -!C>, a bul, drug and formulation are as follo;sC Bul, drug means any pharmaceutical-chemical, biological or plant product including its salts, deri)ati)es etc used as such or as an ingredient in any formulation< *ormulation means any medicine processed out of or containing one or more bul, drug or drugs for internal or e+ternal use or for diagnosis, treatment, mitigation or pre)ention of disease in human beings or animals, but shall not include any medicine included in any bonafide Ayur)edic, 3omeopathic or =nani system of medicine< Thus, -!C> is applicable only to allopathic drugs< Ceiling prices for the -!C> bul, drugs and formulations are notified by the "o)ernment authorities and periodically re)ised< -!C> came into e+istence in %&'( thereafter re)ised in %&'&, %&G' and %&&F<

!PCO 34B>
-!C> came into being for the first time in %&'(< At that time the $ndian pharmaceutical industry predominantly comprised of #NC
RAJIV R.S.
106

PHARMA -RAJIV

affiliates and subsidiaries< $n its introductory form, -!C> ;as more of a control on the profitability of a pharmaceutical business, and thereby it indirectly sought to control the prices of pharmaceuticals< The "o)ernment stipulated that a company.s pre-ta+ profit from its pharma business ;ould not e+ceed %FH of its pharma sales 1net of e+cise duty and sales ta+2< $n case profits e+ceeded this sum, then the surplus had to be deposited ;ith the "o)ernment< So, a pharma company had the freedom to decide its products. prices< !roduct-;ise margins could be fle+ible, so long as the o)erall margin did not e+ceed the stipulated norm< Also, ;ith indi)idual product prices not re@uiring appro)al from relati)ely lo;< Also, the $ndian !atents Act %&'(, ga)e an impetus to local players to re)erse engineer drugs and foray into )arious therapeutic segments< #NCs ;ere not affected too se)erely by the relati)ely mild form of -!C> and continued operating in the domestic mar,et< 3o;e)er, *0RA ;hich came in mid '(.s did curb #NCs7 operations< >)erall, the $ndian pharma industry prospered from %&'( to the ne+t -!C> in %&'&< the go)ernment, bureaucratic hurdles ;ere

!PCO 34B4
$n its %&'& re)ised )ersion, the -!C> stipulated ceiling prices for controlled categories of bul, drugs and their formulation< $n fi+ing the price, the "o)ernment continued to ad)ocate

profitability ceiling< $n case of bul, drugs, this ;as through a limit on the company.s return on net;orth or capital employed<
RAJIV R.S.
107

PHARMA -RAJIV

$n case of formulations, retail prices of controlled products ;ere decided by applying the concept of #A!0 1#a+imum Allo;able !ostmanufacturing 0+penses2 ;hich is a,in to a mar,-up on e+factory costs pro)ided to co)er all selling and distribution costs including trade margins< The pricing formula ;as as under< Retail priceS duty, ;here #C T #aterial Cost including bul, drug and e+cipients CC T Con)ersion cost, as per the dosage form !# T Cost of !ac,ing #aterial 1suitable to dosage form2 !C T !ac,aging Charges S This ;as not #a+imum Retail !rice 1#R!2 of the formulation< /ocal Ta+es ;ere added at time of sale< This practice still continues< -!C> .'& put E'( drugs under price control< *urther these drugs ;ere segregated into E categories, ha)ing different #A!0 C Category $?(H #A!0 Category $$FFH #A!0 Category $$$%((H #A!0 The most important drugs, including life sa)ing drugs ;ere put into Category $, ;hich had the least #A!0 of Bust ?(H< /ater, the "o)ernment introduced a Category $ drugs from Category $$$, such as ;ith I(H #A!0< Some itamins etc ;ere then T 1#CQCCQ!#Q!C2 + 1%Q#A!0A%((2 Q 0+cise

RAJIV R.S.

108

PHARMA -RAJIV

transferred to Category $ , reducing the margins of these products< Around G(H of the $ndian pharma industry 1in )alue terms2 ;as thus brought under strict price control< The #NCs ;ere the ;orst hit< !rofitability fell steeply, ne; in)estments in the sector d;indled and #NCs discontinued many products, especially the life sa)ing products falling under Category $< The #NCs, ;ith industrial licensing re@uirements restricting ne; product

introduction, reeled under the onslaught of se)ere dip in profitability< The local players ;ere granted licenses relati)ely easier compared to #NCs ;ith their ability to speedily introduce ne; drugs, they ;ere able to ,eep -!C> co)erage lo;er< 3ence, they managed to flourish and effecti)ely fight the might of the established #NCs< But, profitability ;ise, the $ndian pharma sector passed through its ;orst phase from %&'& till the -!C> ;as re)ised in %&G'< Research, Patents @ <TO This chapter discusses in detail, the importance of R&-, patents in the global pharma $ndustry and the changes in patent la;s to be enforced under 6T><

Research !riven Industry

!harmaceuticals industry is dri)en by a global need to con@uer disease< #edicines are de)eloped to treat ne; diseases or impro)e upon the e+isting treatment< An in-depth understanding of human physiology and disease mechanism is a pre-re@uisite to

RAJIV R.S.

109

PHARMA -RAJIV

pharma

R&-<

To

facilitate

research,

companies

usually

concentrate on select therapeutic areas such as anti-ulcer, anticancer etc< #aBor diseases for ;hich ne; drugs are continuously being researched globally are A$-S, Al5heimer.s disease, arthritis 1rheumatism2, cancer, depression, diabetes, heart disease,

osteoporosis and stro,e<

+asic vs Process R@!

Basic research deals ;ith disco)eryA in)ention of a ne;

medicinally effecti)e chemical< !rocess R&- is basically re)erse engineering of a molecule through slight process modifications< Basic research is both time and cost intensi)e< 3undreds of molecules need to be analysed to determine possible

effecti)eness< *ollo;ing such laboratory testing, actual clinical trials are then carried out to determine the drug.s efficacy on patients< The process thus re@uires around %:-%F years and costs =SDEF(-?((mn per ne; chemical entity 1NC02< !rocess R&- is far easier and costs are negligible compared to basic research<

Patents
!atents are a )ital aspect of the global pharma industry< !atent protection is essential to spur basic R&and ma,e it

commercially )iable< But, only the de)eloped nations endorse product patents< #ost third ;orld countries ha)e patent la;s but enforcement is totally la+< Some de)eloping nations li,e $ndia, 0gypt and Argentina allo; only process patent registration< As a

RAJIV R.S.

110

PHARMA -RAJIV

result pharma R&- is concentrated amongst the pharma #NCs in =SA, Japan and 0urope< The leading #NCs ha)e a geographically ;idespread mar,et reach spanning almost the entire globe, hence their high R&- costs can be spread o)er a large user base< A researcher underta,es patent registration once a molecule sho;s some promise of therapeutic effecti)eness< !atent life counter starts running from the day the patent application is made< The patent office then starts the process of establishing that the molecule is uni@ue< The steps in)ol)ed areC 6ithin %G months of filing the application, a brief ;rite up of the molecular structure and its therapeutic utility is published as a public document< !atent office thereby in)ites obBections, if any, from third parties eg competitors< >bBections recei)ed are con)eyed to the applicant ;ho has a chance to defend or modify his claim to originality< The modified claims are republished and once again obBections are in)ited< >nce the patent office is satisfied about the applicant.s claim, it grants the patent< The ;hole process ta,es ?-F years due to significant bac,log in the patent registration office< >nce a patent is granted in one of the de)eloped nations, it is relati)ely easier to get it in other countries< Also, certain patent authorities ha)e co)erage o)er

RAJIV R.S.

111

PHARMA -RAJIV

many nations eg 0uropean !atent >ffice co)ers a large part of the 0uropean sub-continent< New !ru$ Approval 6N!A8 !rior to launching its products in any country, a pharma company underta,es patent registration to protect its o;n interests< To protect the interests of the consumers, it is necessary that the product be appro)ed by the drug authorities in that country< #ostly the process for see,ing appro)al is initiated alongside the patent registration process< An N-A 1Ne; -rug Application2 is filed ;ith the drug authorities - such as *-A in =S or -rug Controller in $ndia, detailing the ne; molecules. therapeutic properties< Then, clinical trials are carried out in E stages< Animal to+icity 1Testing on animals2< Trials on a fe; select )olunteers< Trials on a larger scale in hospitalsA institutions< -rug authorities appro)al has to be ta,en at each stage and only ;hen all three trial stages are successfully completed can the product be launched< >nce a ne; product has been launched in any of the de)eloped countries li,e =SA, Japan or 0urope, it ta,es relati)ely lesser time to get appro)al from drug authorities in other countries< Glo al Price /ariations::: -rug prices )ary from country to country for a number of reasons including patent regulations, go)ernment controls,

income differences, currency e+change fluctuations etc<

RAJIV R.S.
112

PHARMA -RAJIV

Patent re$ulation 1 !atents pro)ide the inno)ator e+clusi)ity of manufacture o)er the life of the patent< To ma+imise gains, pharmaceutical companies charge high premium on their under patent products< As patent la;s are stringent only in the de)eloped nations, accordingly formulation prices too are much higher in these mar,ets< A comparison of formulation prices bet;een $ndia, !a,istan, =SA and =4 is gi)en in Anne+ure :<

Government control 1 -ue to la+ of patent la;s in de)eloping countries, local players are able to infringe upon the original patent holder.s rights ;ithout payment of royalty< 3ence, the cost of manufacture of re)erse engineered pharmaceuticals is significantly reduced< To pre)ent undue profiteering by local pharmaceutical companies, the "o)ernments in such countries often impose price controls on popularly used drugs and formulations< 0)en some maBor industrialised countries of 0urope distort the mar,et mechanism by imposing price controls< This in turn causes higher prices in free mar,ets li,e =SA, as companies try to enhance salesA profits by charging ;hat the traffic bears< Income disparity 1 $n de)eloping nations ;ith lo; per capita income and lo; standard of li)ing, pharma #NCs are faced ;ith the choice of either selling products at artificially lo; prices or denying patients the benefits of the drugs< :::Its impact

RAJIV R.S.

113

PHARMA -RAJIV

-ue to fear of piracy and lo; product prices in third ;orld countries, most #NCs are reluctant to introduce their top-of-theline products in these places< So, patients in these countries compulsorily lose out on better treatment options< #aBority of the #NCs. conduct research on those diseases that affect the population in de)eloped nations ;hile tropical diseases get lo; priority< 6ide )ariations in pharma prices bet;een de)eloped and de)eloping nations ha)e resulted in increasing resistance to runa;ay healthcare costs in the de)eloped nations, especially =SA< 6ithin a therapeutic segment, generic substitutes to the under-patent drugs generally e+ist< Though often lesser effecti)e, they are able to reduce the cost of treatment significantly< This methodology has been gaining popularity in last fe; years< #anaged 3ealthcare, as it is called, is a,in to medical insurance and it usually follo;s the principle of encouraging generic substitutes to curtail medical e+penses< -e)eloping nations that impose price controls reduce the competiti)eness of pharma companies in these countries< !rice & )olume controls pro)ide fe; incenti)es for inno)ation< 6hile price controls lo;er drug prices, they do not necessarily reduce healthcare costs< A more e+pensi)e drug may mean faster reco)ery, possibly eliminating future hospitalisation and hence, o)erall it may pro)e cost effecti)e<

RAJIV R.S.

114

PHARMA -RAJIV

<TO
-ue to pressure from the de)eloped countries, across the ;orld uniformity in patent la;s is being implemented under 6T> 16orld Trade >rganisation - earlier "ATT i<e< "eneral Agreement on Tariffs & Trade2< !resently, different countries ha)e different patent types and life period< 6T> has decided upon a product patent life of :( years in all countries< 3o;e)er, to ensure a smooth transition and pro)ide local players in the de)eloping countries, ample time for gearing themsel)es, a moratorium upto the year :((FAA- has been pro)ided< So, ne; products i<e< drugs introduced after this date ;ill ha)e to be accorded product patent protection e)en in countries li,e $ndia or Argentina< 3o;e)er, e+isting pharmaceuticals and ne; products that ;ill be

introduced in the interim period ;ill all continue to be re)erse engineered in nations ;hich do not ha)e product patent la;s<

RAJIV R.S.

115

PHARMA -RAJIV

I"PACT ANA'*SIS ON NPPAKS PRICE RE/ISION O- II -OR"('ATIONS ON CO"PANIES

)i$hli$hts
!rices of E% formulations pac,s re)ised up;ards in bet;een (<:E-'<E:H< !rices of G formulations pac,s re)ised do;n;ards in bet;een (<%E-:(<&H< !rices of %I formulations pac,s fi+ed for the first time< The therapeutic segments for ;hich prices are re)isedA fi+ed areC Anti-diabetic 1$nsulin based formulations2 Anti-TB 1Rifampicin based formulations2 Anti-ulcer 1Ranitidine based formulations2 Topical corticosteroids Analgesics Systemic corticosteroids 1others2 $mpact AnalysisC Therapeutic Segment 6ise

Anti-diabetic 1$nsulin based formulations2 0ily /illy Ranba+y is the maBor loser as & of its formulations ha)e been brought under price control< Top ? brands contribute more

RAJIV R.S.

116

PHARMA -RAJIV

than EFH of the annual turno)er< $n *8&&, 3uminsulin, ;hich accounts for more than :&H of the turno)er, has registered gro;th of GFH yoy< +rand 3uminsulin 9 o& turnover :&<' :<' $lctin E(A'( The fi+ed prices of insulin formulations ;ill be Rs%&G<'? for Emg human insulin regular inBection< RsEG?<(I for Emg insulin /ispro inBection< RsF(G<%F for %(ml human insulin regular inBection< Anti-TB 1Rifampicin based formulations2 /upin /abs and No)artis are the maBor gainers from the up;ard re)ision of rifampicin based formulations< /upin is the domestic mar,et leader in anti-TB segment ;ith o)er ?FH of the mar,et share< The E brands namely R-Cin, R-Cine+ and A4T-? contribute almost :FH of the domestic sales< But the : brands R-Cin and RCine+ ha)e registered negati)e gro;th in *8&& ;hile A4T-? is gro;ing at EE<?H yoy< 3o;e)er, it may be noted that t;o brands namely R-Cin and R-Cine+ ha)e registered negati)e gro;th of IH and :<%H respecti)ely in *8&&< But the loss in mar,et share of R-Cin and R-Cine+ is compensated by A4T-? 1combination pac,2 ;hich is gro;ing at EE<?H yoy in *8&&< Another gainer is No)artis ;hose anti-TB brand Rimacta5id has I<FH mar,et share Growth 9 yoy GF<( :F(<(

RAJIV R.S.

117

PHARMA -RAJIV

and contributes F<&H to the domestic mar,et pharmaceuticals di)ision sales<

+rand Company Sales 6Rs mn8 "ar,et share 9 9 o& turnoverL Growth 9 yoy

R-Cin

/upin /abs /upin /abs

:'(<( :'(<(

%:<& %:<&

&<& &<&

1I<(2 EE<?

A4T-? *Indicates sale of brands as % of formulation sales of the company in the domestic market Anti0ulcer 6Ranitidine ased &ormulations8

"la+o, Cipla , Ranba+y and JB Chemicals are the maBor gainers from the up;ard price re)ision of ranitidine based anti-ulcerant formulations< $n *8&&, "la+o.s Kinetac and Ranba+y.s 3istac ha)e registered negati)e gro;th of %:<IH and %F<%H respecti)ely< These t;o brands are losing mar,et share to Cipla.s Aciloc and JB Chemicals Rantac<

RAJIV R.S.

118

PHARMA -RAJIV

+rand

Company

Sales 6Rs mn8

"ar,et share 9

9 o& turnoverL

Growth 9 yoy

Kinetac "la+o
Ranba+y 3istac

?FF %:F

%F<: ?<%

I<( :<&

1%:<I2 1%F<%2

*Indicates sale of brands as % of formulation sales of the company in the domestic market

Topical Corticosteroids
"la+o, "lenmar, and *ulford are the maBor gainers from the up;ard price re)ision of topical corticosteroids< The price of Betno)ate has been increased by G<&IH< 9uadiderm accounts for more than EFH of *ulford.s annual turno)er of formulations< The product is the mar,et leader and the up;ard price re)ision ;ill ha)e positi)e impact on profitability<
+rand Company Sales 6Rs mn8 "ar,et share 9 9 o& turnoverL Growth 9 yoy

Betno)ateN

/upin /abs *ulford

:'(<( E&?<(

%:<& %?<F

&<& EI<'

1I<(2 :%<(

9uadriderm *Indicates sale of brands as % of formulation sales of the company in the domestic market

RAJIV R.S.

119

PHARMA -RAJIV

Anal$esics
The maBor gainer is Rec,itt & Coleman as price of its brand -isprin is increased by %% paise per pac, 1strip of %( tablets2< -isprin is Rs%%Fmn brand ;ith sales gro;th of o)er %:H in *8&&< -isprin is manufactured by Rec,itt & Coleman and mar,eted by Rec,itt !iramal, a Boint )enture bet;een Rec,itt & Coleman and Nicholas !iramal< Systemic Corticosteroids 6others8 6yeth /ederle is the loser as price of its formulation 6ysolone, is fi+ed for the first time< A strip of %( tablets ;ill cost Rs:&<':< 6ysolone is Rs:((mn brand ;ith sales gro;th of %G<FH accounts for %(H of the formulation sales in the domestic mar,et<

Conclusion
#aBor gainers are "la+o 1up;ard price re)ision for Kinetec and Betno)ate 2, /upin /abs 1up;ard price re)ision for R-Cin, R-Cine+ , A4T-? and E other formulations2, *ulford 19uadriderm2, Cipla 1Aciloc2, JB Chemicals 1Rantac2 and Rec,itt & Coleman 1-isprin2< The losers are 0ily /illy Ranba+y 1insulin based formulations2 and 6yeth /ederle ;hose 6ysolone.s price is fi+ed for the first time<

RAJIV R.S.

120

PHARMA -RAJIV

!omestic Companies Alembic Chemical 6or,s Co /td ABanta !harmaceuticals /td Ambalal Sarabhai 0nterprises /td Apollo 3ospitals 0nterprise /td Aurobindo !harma /td Cadila 3ealthcare /td Cheminor -rugs /td Cipla /td -r Reddy.s /aboratories /td *-C /td

$nd-S;ift /td
$pca /aboratories /td Jagsonpal !harmaceuticals /td J B Chemicals and !harmaceuticals /td 4opran /td /upin /aboratories /td #a+ $ndia /td #orepen /aboratories /td Nicholas !iramal $ndia /td >rchid Chemicals and !harmaceuticals /td Ranba+y /aboratories /td Searle $ndia /td Shasun Chemicals /td Sun !harmaceutical $ndustries /td Torrent !harmaceuticals /td =nichem /aboratories /td

RAJIV R.S.

121

PHARMA -RAJIV

6oc,hardt /td Kandu !harmaceutical 6or,s /td

"ulti National Companies

Abbott /aboratories $ndia /td1#NC2 Alpha -rugs $ndia /td Astra $-/ /td Burroughs 6ellcome $ndia /td -uphar-$nterfran /td 0-#erc, 1$ndia2 /td *ulford $ndia /td "erman Remedies /td "la+o $ndia /td No)artis $ndia /td 3oechst #arion Roussel /td 4noll !harmaceuticals /td !ar,e -a)is $ndia /td !fi5er /td Rhone !oulenc 1$ndia2 /td Smith,line Beecham !harmaceuticals 1$ndia2 /td 6yeth /ederle /td Alembic /td

RAJIV R.S.

122

PHARMA -RAJIV

EAEC(TI/E S(""AR*
Alembic.s recogni5ed mainly for its cough syrup "lycodin ,no;n has a product portfolio comprising of anti-infecti)e, NSA$-s and cough A cold preparations< $t also manufactures the drug intermediate !enicillin-" for in-house consumption as ;ell as for outside mar,ets< The =SDE((bn global pharmaceutical industry is research dri)en< Ne; drug R&cost being prohibiti)e, it is limited to

pharmaceutical #NCs

in de)eloped nations

;here

product

patents are enforced< 3igh prices of under-patent drugs are causing a shift to generics, especially in =SA and 0uropean mar,ets< So, to spread their R&- costs o)er a larger base, pharma #NCs are consolidating through mergersA alliances< 3istorically, $ndia has recogni5ed only process patents< =nder 6T>, as per TR$!s agreement $ndia too has to enforce product patents latest by year :((F A-< $n the Rs%E(bn $ndian pharma sector, prices of o)er I(H of the drugs A formulations are "o)ernment controlled 1through -!C>2< $n the domestic bul, drugs mar,et, lo; entry barriers ha)e resulted in o)ercapacity and price ;ars< So, maBor players are focussing on formulations, ;here brand image and distribution net;or, act as entry barriers< #ost players are increasing their o)erseas mar,etingAmanufacturing net;or, in order to enhance e+ports 1under patent drugs to third ;orld countries and generics to de)eloped nations2< $n anticipation of 6T>, #NCs are

RAJIV R.S.

123

PHARMA -RAJIV

strengthening their ran,s in $ndia - either setting up ne; %((H subsidiaries or mar,eting tie-ups ;ith maBor domestic players< /arge local players are consolidating through brand ac@uisitions, co-mar,eting A contract manufacturing tie-ups ;ith #NCs etc< Alembic.s domestic sales ;ill be dri)en by ne; launches in therapeutic segment of nutritional preparations, anti-infecti)e, anti-bacterial and respiratory ailments< Alembic is e+panding its fermentation facility to manufacture intermediates of

Cephalosporin drugs as the patent for some cephalosporin drugs are e+piring in the ne+t couple of years and has substantial e+port potential<

RAJIV R.S.

124

PHARMA -RAJIV

ANNEA(RE M 1 +('? !R(GS CONTENTS1

I-A!A %,g !enicillin " #ethylene Chloride E<: %

B>
,g

1'-A-CA is also made by an alternati)e en5ymatic route2 Amodia@uin %,g ?-3ydro+y-'-Chloro@uinoline (<F? 3Cl

,g

1There are also many other intermediatesA chemicals used in the process2 %,g Aniline >il (<'E Analgin %,g !henol (<' Aspirin

4g ,g

RAJIV R.S.

125

PHARMA -RAJIV

6Acetyl Salicylic Acid8 Atenolol %,g !ara 3ydro+y Acetophenone %,g -/-:-Amino Butanol

%<GF %<'F

,g ,g

0thambutol 3C/ $sopropyl Alcohol : ,g

RAJIV R.S.

126

PHARMA -RAJIV

RAJIV R.S.

127

PHARMA -RAJIV

!iro+icam =S!

%,g

Sodium Saccharin :-Amino !yridine !otassium Tertiary Buto+ide

%<?& (<FF (<:??

,g ,g ,g

RAJIV R.S.

128

PHARMA -RAJIV

-omperidon e

%,g

>-!henylene -iamine #ethy Aceto Acetate !enicillin " !otassium

%<'E %<GI %<&E

,g ,g ,g

%,g

RAJIV R.S.

129

PHARMA -RAJIV

RAJIV R.S.

130

PHARMA -RAJIV

Cefadro+yl

1Chloramphenicol is con)erted to its !almitate for usage in formulations2 Chlorphenira %,g :-Chloropyridine (<FF mine #aleate %,g !yrrole %<:F

,g

,g

4etorolac Tromethami ne

RAJIV R.S.

131

PHARMA -RAJIV

1!aracetamol is also made by !NCB route2 Ciproflo+acin %,g E-Chloro-?-*luoro Aniline

:<:F
132

,g

RAJIV R.S.

PHARMA -RAJIV

1:,?--ichloro *luoro Ben5ene can also be used instead of E-C-?-* Aniline2 Clotrima5ole %,g :-Chloro Ben5o Tri-Chloride %<? ,g

1I-A!A is an intermediate deri)ed from !enicillin "2 -e+amethas one %,g 0po+y %<(% ,g

Ben5ophenone

%<:F

,g

RAJIV R.S.

133

PHARMA -RAJIV

RAJIV R.S.

134

PHARMA -RAJIV

ANNEA(RE G 1 PATENT EAPIR* !ATES

!atent e+piry %(-Jun-&F Bul, drugs Albendaole >ndansetron !atent holder Smith 4line Beechem "la+o

%-Jan-(F

RAJIV R.S.

135

PHARMA -RAJIV

ANNEA(RE 3 1 IN!IAN PATENTS ACT 34B>

The patent system ;as first introduced in $ndia in %GFI< The Act of %GFI pro)ided e+clusi)e right to the patent holder for a period of %? years< The $ndian !atents & -esign Act, %&%% replaced the abo)e act but, the main clauses remained the same< !ost$ndependence, in %&?', a need ;as felt to re)amp the la;s related to patents so as to reduce the stronghold of #NCs and pro)ide an impetus to local industrial gro;th< Considerable efforts ;ent into formulating the $ndian !atents Act ;hich ;as introduced as a Bill in %&'( and finally enacted from :(<?<%&':< The $!A pro)ides product patents for all in)entions e+cept food, medicine, drugs and substances produced by chemical process< *or these only process patents can be registered< The basic philosophy has been to disallo; monopoly but instead encourage research and help in o)erall gro;th in these sectors< Besides agriculture and horticulture, biological materials and life forms are e+cluded from the scope of patentability< Space and atomic energy also fall outside patent ambit< $ndia pro)ides patent protection only for %? years, the shortest period granted by any country< $n fact, in case of food, chemicals, pharmaceuticals and agrochemicals, the patent period is only F years from the date of sealing or ' years from date of patent, ;hiche)er is lesser< $n case of non-;or,ing of patent ie patent holder does not commercialise his in)ention, the Act pro)ides that after E years of sealing of a patent, any other person can apply for compulsory licensing on the grounds of public benefit<

RAJIV R.S.

136

PHARMA -RAJIV

ANNEA(RE = 1 G'O+A' PRICE /ARIATIONS 0 -OR"('ATIONS

+rand @ !osa$e 6Pac,8

Prices 6Rs:8

Prices 6times costlier8

India Anti ioticE Anti acterial >flo+acin :((mg 1? tab2 &:

Pa,istan

(SA

(?

Pa,istan

(SA

(?

%%'<:

?(G<%

:%'<E

%<E

?<?

:<?

Anti0in&lammatory -iclofenac F(mg 1%( tab2 F FF<G EEF &I<F %%<E I'<' %&<F

Anti0ulcer Ranitidine E(( mg 1%( tab2 %G<F :I(<? %(F(<' ?G?<? %?<% FI<' :I<%

Cardiac care Atenolol F(mg 1%( tab2 %% GI<I E%F<' %(%<: '<& :G<' &<:

Anti0viralE Anti0&un$al 4etacona5ole F'<& ::: %(G:<& :''<: E<G %G<' ?<G

RAJIV R.S.

137

PHARMA -RAJIV

:((mg 1%( tab2

Anti0histamine Astemi5ole %(mg 1%( tab2 %: %:(<& I?'<F %?:<I %(<% F? %%<&

Anti0an%ioytic Alpra5olam (<Fmg 1%( tab2 %E :?I<G ?I<I %& E<I -

Anti cancer #ito+antrone :ml 1%( ml2 F&F ::?:G<' '&':<G E'<' %E<? -

Others Nimodipine E(mg 1%( tab2 F&<% %'F:<G :(I<: :&<' E<F -

E&<F >ndansetron 3Cl ?mg 1I tab2

::?'

%:G'<&

FI<G

E:<I

RAJIV R.S.

138

PHARMA -RAJIV

-I/E *EAR -ORECAST O- T)E G'O+A' P)AR"ACE(TICA' "AR?ETS

#ar,et !roBected to "ro; at '<G !ercent Annually to D?(I Billion in :((:< Buy this time North America, 0urope, Japan and /atin America are proBected to account for GF<:H of the ;orld;ide pharmaceutical mar,et<

RAJIV R.S.

139

PHARMA -RAJIV

Pro!ected "orld Pharmaceutical #arket by $e%ion by &''& ()S* billion+ * Re$ional Pharmaceutical "ar,et Growth -uring the ne+t fi)e years, the fastest gro;ing regions are e+pected to be North America, the #iddle 0ast, Australasia and Southeast Asia, including China< Japan and 6estern 0urope pharmaceutical mar,ets are e+pected to gro; at rates slo;er than the global a)erage< "ro;th in the Japanese mar,et ;ill continue to be constrained by economic pressures in the first half of the period under re)ie;, but ;ill impro)e in the second half< #ore on North America, 0urope and South 0ast Asia< Therapeutic Areas $n terms of gro;th rate among the ten de)eloped mar,ets of Australia, Belgium, Canada, *rance, "ermany, $taly, Spain, Japan, the =nited 4ingdom and the =nited States, Blood & Blood *orming >rgans products are e+pected to e+perience the strongest gro;th, increasing to &<E percent of the

RAJIV R.S.

140

PHARMA -RAJIV

pharmaceutical mar,et by :((:< #usculo-S,eletal products are proBected to gro; to an G<? percent mar,et share during the same period< The gro;th rate of Cardio)asculars is e+pected to slo; during the ne+t fi)e years, representing Bust I<% percent of the pharmaceutical mar,et in :((:< #ore on the *ar 0ast and /atin America<<< $nformation from $#S 30A/T3 "lobal !harma *orecasts %&&G:((: part of the !harma !rognosis series< $t includes fi)e-year gro;th proBections for the pharmaceutical mar,ets in :E( countries and %% regions<

RAJIV R.S.

141

PHARMA -RAJIV

*EAR EN! ANA'*SIS O- G'O+A' SA'ES 3445

The <orld "ar,et The ;orld-;ide pharmaceutical mar,et is ;orth E(' bill1D2 in %&&G according to $#S 30A/T3.s mar,et estimate in

!harmaceutical ErrorN )yperlin, re&erence not valid: , a year end analysis of the sales dynamics of the pharmaceutical mar,et< This represents a E<IH increase o)er last year< The =SA mar,et continues to dri)e the gro;th ;ith an %%H increase, ;hile 0urope gre; at ?<IH< Australasia, Africa, and Asia 1AAAAA2 declined by -I<GH and /atin America recorded a slight increase of :<: H< Based on the $#S 3ealth audited sales channels used in !harmaeutical 6orld Re)ie; there ;ere notable performances from indi)idual countries< $n 0urope, !oland sustained strong gro;th of ??H at constant e+change rates, S;eden and C5ech Republic gre; at %IH and $reland at %FH< $n AAAAA the economic crisis and currency de)aluation ha)e ta,en their toll< At =SD e+change rates, 4orea, Thailand and $ndonesia all e+perienced a decline in e+cess of E(H< 6ithout the e+change rate fluctuations, 4orea gre; ?H, $ndonesia EEH, Thailand -%FH and Japan -%H<

RAJIV R.S.

142

PHARMA -RAJIV

(S7 Growth o& top ten mar,ets

ased on mar,et estimates

/atin America suffered similar economic problems and this had an ad)erse affect on Bra5ilian %&&G sales, ;hich declined -FH, con)ersely Argentina the second largest mar,et gre; IH< 3445 Pharma "ar,et Estimates +illions678

RAJIV R.S.

143

PHARMA -RAJIV

RAJIV R.S.

144