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In-depth India's "World Pharmacy" Path

 Last Update: 2022-10-25
 Source: Internet
 Author: User

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The global biomedical industry is showing a trend of agglomeration development, with developed countries and regions represented by the United States and Europe dominating, and emerging economies represented by China and India are rising
rapidly.
From the perspective of the international market, in recent years, the scale of India's pharmaceutical and health market has grown rapidly, and it has become the world's largest supplier of generic drugs, occupying 20% of the global generic drug market, supplying 40% of the generic drug demand in the United States, 60% of the global vaccine demand and 25% of the drug demand
in the United Kingdom.
India is also known as the "pharmacy of the world"
for its low-cost and high-quality medicines.
In this paper, the author mainly analyzes the development status, development history, park model, and development experience of India's pharmaceutical and health industry, in order to provide reference for industrial development in government parks across China and for pharmaceutical companies to explore the Indian market
.

Overview of the development of the pharmaceutical and health industry in India

(1) Industrial scale

India's domestic pharmaceutical market has grown rapidly and its international competitiveness has continued to improve
.
From the perspective of industrial scale, the size of India's domestic pharmaceutical market will reach 42 billion US dollars in 2021, and it is expected that the domestic market will triple in the next ten years, reaching 65 billion US dollars by 2024 and 120 billion ~ 130 billion US dollars
by 2030.
In terms of investment growth, according to the India Economic Survey 2021-2022, foreign direct investment (FDI) in India's pharmaceutical sector increased by 200%
between 2020 and 2021.
India's pharmaceutical industry ranks third in the world in terms of output, with total pharmaceutical exports of $24.
4 billion and imports totaling $7 billion, far outpacing imports
.
In terms of product sector, preparations and biological products accounted for the main share of 73.
31% of the country's total exports, followed by APIs and pharmaceutical intermediates
.
In terms of regional markets, India's top five pharmaceutical exporters are the United States, the United Kingdom, South Africa, Russia and Nigeria
.

India's domestic pharmaceutical market has grown rapidly and its international competitiveness has continued to improve
.

(2) Industrial fields

In the field of generic drugs, 90% of companies in India are mainly engaged in the production of generic drugs, and Indian pharmaceutical companies account for 40%
of the top 10 generic drug companies in the world in 2021.
Among them, Sun Pharmaceutical, as a leading pharmaceutical company in India, had sales of generic drugs of US$4.
64 billion
in 2021.
It was followed by Arabindo Pharmaceutical, Sipra and Dr.
Reddy, with sales of 3.
18 billion, 26.
5 and 2.
17 billion US dollars
respectively.

In the field of generic drugs,

Table 1: Overview of key generic drug enterprises in India

Source: Firestone Creation is compiled based on publicly available information

In the field of APIs, India has become the second largest exporter of APIs in the international market by virtue of the capital and experience and technology accumulated in China to promote the production of characteristic APIs with the generic drug industry, and its current advantages are mainly concentrated in the field of raw materials for drugs that are in the patent protection period or those that have just ended the patent protection period, such as anti-infection, cardiovascular, breath field and central nervous system drugs
.

Table 2: Overview of key API enterprises in India

Source: Firestone Creation is compiled based on publicly available information

In the field of medical devices, in recent years, India has developed rapidly in the fields of medical device equipment, instruments, consumables and implants, and has developed into the fourth largest medical device market in Asia, gathering many leading medical device enterprises
such as Transasia, Trivitron, Polymed, HMD, SMT and so on.
According to India's Health Minister Mansukh Mandavia in 2022, India's medical device industry has the potential to grow at an annual rate of 28% to reach $50 billion
by 2030.

In the field of medical tourism, thanks to factors such as the high concentration of professional medical talents in India, advanced medical equipment, abundant tourism resources and 1/10 of the treatment cost compared to the international markets in Europe and the United States, India has become one of the largest medical tourism destinations in Asia, and the treatment market for foreign tourists visiting India is growing rapidly at
a rate of nearly 25% per year.

In the field of medical tourism, India has become one of the largest medical tourism destinations in Asia, and the therapeutic market for foreign tourists visiting India is growing rapidly at
a rate of nearly 25% per year.

The development of India's pharmaceutical and health industry

Phase 1 (1970-1990): Abolition of patents on pharmaceutical products, restriction of the development of multinational pharmaceutical companies and cultivation of local pharmaceutical companies

In 1970, the Indian government promulgated the Patent Act, which stipulates that only process patents are granted to pharmaceutical products, not product patents, so that Indian enterprises can legally copy the patented drugs of multinational pharmaceutical enterprises, providing space for the rapid expansion of generic drugs in India
.

In 1970, India issued the "Drug Price Control Rules" Through strict control of domestic drug prices, the profits of pharmaceutical manufacturers have dropped sharply, the market share of multinational pharmaceutical companies has gradually declined, and the rapid emergence of local enterprises has been promoted, and since then low prices have become the "main theme"
of the Indian pharmaceutical market.

In 1973, India implemented the Exchange Control Act, which proposed that foreign investment should not hold more than 40% of Indian enterprises, resulting in a large number of multinational pharmaceutical companies that dominate the Indian pharmaceutical industry
.

Phase 2 (1991-2005): Gradually integrate with international rules and build a global industrial competitive advantage

In 1995, India joined the WTO, further relaxing foreign investment restrictions and encouraging the development of
pharmaceutical joint ventures.

In 2004, India promulgated the Patents (Amendment) Regulations 2004, which granted protection to pharmaceutical product patents and process patents, and set the term of protection at the internationally accepted 20 years
.

In 2005, India implemented the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and introduced new patent laws to align with international markets
.
Further promote the increase of drug R&D activities by local pharmaceutical enterprises in India and the establishment of R&D centers by multinational pharmaceutical enterprises, making India quickly become a gathering place
for drug research and development in Asia.

Phase 3 (2006-present): Increase the reform of the pharmaceutical system, optimize the industrial development environment, and guide industrial innovation and development

In 2007, India launched the National Biotechnology Development Strategy to increase support for biotechnology enterprises
.

In 2009, India introduced a new Patent Act, which stipulates that drugs approved by the US FDA do not need to be tested
in India when they are marketed.

In 2011, India implemented the Medicines and Cosmetics Regulation (Revised), relaxing the application conditions for clinical trials and allowing concurrent clinical trials
in India.

In 2012, India issued the Biosimilars Guidelines to provide institutional support and guarantee
for the R&D and production of biosimilars in India.

After 2012, the maximum price limit policy will be implemented for the national essential drugs, and the price control
of corresponding APIs will be lifted.

India's key pharmaceutical and health industry cluster

Multiple entities cooperate to build a park platform, integrate the superior resources of all parties, and promote the development
of industrial clusters.
From the perspective of industrial space agglomeration, the R&D and production functions of India's pharmaceutical industry are mainly concentrated in Hyderabad, Mumbai, Bangalore and other three major cities
.
From the perspective of industrial park development model, there are two development models of Indian pharmaceutical and health industry parks: one is the geographical aggregation
of a number of biotechnology enterprises.
Including government-led investment construction, government-private cooperation construction, government and international organizations joint construction, government and financial institutions joint construction, government and university joint construction and other models
.
The other is the internal park of the enterprise, which is mainly invested and constructed by the company to carry out the research and development and production activities
of the enterprise.
Table 3: Development model of typical pharmaceutical and health industry parks in India

Multiple entities cooperate to build a park platform, integrate the superior resources of all parties, and promote the development
of industrial clusters.

Source: Firestone Creation is compiled based on publicly available information

Experience in the development of pharmaceutical and health industry in India

(1) Strengthen the top-level design and build a clear management system and division of labor

First, in 1986, the Ministry of Science and Technology of India established the Department of Biotechnology, carried out industrial promotion programs, provided tax incentives and subsidies to support the start-up and expansion of biotechnology enterprises, and established the Indian Association of Biotechnology Parks to strengthen the construction
of biotechnology professional parks.

The second is to create the National Innovation Council (NINC) in 2010, formulate the innovation planning roadmap for 2010-2020, and launch the Science, Technology and Innovation Policy 2013-2017 in 2013 to support innovation and talent training, and guide the transformation of the industry to an innovation-driven development model, such as launching the Inclusive Innovation Fund (IIF) to support innovation, relying on the Confederation of Indian Industry (CII) to open a skills training center, teaching scientists and industrial technology
。

The third is the establishment of the Biotechnology Industry Research Association Council (BIRAC) in 2012 to actively promote industry-university-research cooperation and support projects at all stages of the "innovation cycle", from ideation, proof of concept, testing to post-product development, and finally commercialization
in the market.

(2) Government protection, cutting into characteristic segmented fields, and building global competitiveness

Cut into the field of generic drugs to build a global competitive advantage
.
In the early stage, we will create a legal system and administrative management system environment with local enterprise protectionism, focus on supporting local pharmaceutical companies to seek technological breakthroughs in the field of generic drugs internally, attach importance to drug exports externally, promote the rapid development of generic drugs, and gradually integrate with the rules of the international market after generic drugs occupy the main international market, improve the investment environment for domestic industrial development, and make use of the cost and quality advantages in the field of generic drugs to promote the industry from imitation to innovation to international mergers and acquisitions and expansion, and finally complete transformation and upgrading
.

Cut into the field of generic drugs to build a global competitive advantage
.

Flexibly use restrictions to enhance the competitiveness of
local enterprises.
First, in line with the principle of protecting the dominant position of local biomedical enterprises from being weakened, the design of the patent system adopts the idea of first being relaxed and then strict; The second is to implement foreign exchange control and restrictions on the shareholding ratio of foreign capital, and implement strict investment control policies and drug price control, thereby limiting the expansion
of multinational pharmaceutical enterprises.
The third is to introduce a "compulsory patent licensing system", which stipulates that the compulsory license right
can be exercised on pharmaceutical patents under certain specific conditions.
The Indian government provides US$2 billion in financial support for domestic private enterprises and foreign investors to promote the domestic production of 53 key APIs, support domestic API production, and reduce dependence on
Chinese APIs.

Flexibly use restrictions to enhance the competitiveness of
local enterprises.

(3) The government attaches importance to investment in R&D and innovation, improves the policy support system, and guides and subsidizes enterprises to develop innovative drugs

Construct a pharmaceutical innovation support policy system
covering "pharmaceutical research and development - preclinical research - clinical research - approval - market circulation".
Among them, in the stage of pharmaceutical research and development, strengthen the government's investment in infrastructure construction, stipulate that a certain proportion of enterprise income must be used for research and development, and set up the Drug Development Promotion Bureau to increase financial support for joint research and development projects of industry, education and research institutions; In the early clinical stage, the Indian Central Drug Standards Control Organization approved drugs that have passed preclinical/toxicological animal studies abroad to avoid repeated research, strengthening the improvement of research progress efficiency; In the clinical research stage, provide low-interest assistance loan support for research institutions; In the stage of listing and circulation, the focus will be on supporting the development of local enterprises and supporting the export
of generic drugs.

Construct a pharmaceutical innovation support policy system
covering "pharmaceutical research and development - preclinical research - clinical research - approval - market circulation".

Attach importance to financial support
for the development of the pharmaceutical industry.
India has listed the biomedical sector as a priority investment area and encouraged commercial banks to give priority to providing financial support
to the biomedical sector.
At the same time, the government has introduced a series of policies and measures to increase tax breaks for the pharmaceutical industry and R&D expenditure, and established the Drug Research and Development Support Fund (PRDSF) to provide financing
for key drug research projects through tendering.

Attach importance to financial support
for the development of the pharmaceutical industry.

(4) Strengthen international cooperation and make good use of international resources to enhance the innovation ability of enterprises

First, with the advantage of language and culture, imitate European and American standards to establish an international pharmaceutical enterprise management system and quality system, and promote the pharmaceutical industry to form an export-oriented economy
.

The second is to promote international biomedical technology exchanges and cooperation by building international cooperation
centers such as the India-Asia Biotechnology Network and the India-Singapore Biotechnology Park, and establishing bilateral funds with the United States, Australia and other countries.

The third is to actively guide Indian pharmaceutical companies to establish strategic alliances
with research institutions and foreign companies with research and development skills.

brief summary

Looking at the world, the development of generic drugs is the basis for
most developing countries to establish a pharmaceutical industry system.
India, relying on its advantages in talents, languages, labor costs and markets, has established the world's most competitive generic drug R&D and production system through long-term purposeful, planned and focused support and development of the pharmaceutical and health industry, continuous investment in innovation and R&D and international cultivation, and industrial development has shown a high degree of
market concentration 。 At present, Chinese pharmaceutical enterprises are mainly generic drugs, although in recent years the scale of the generic drug industry continues to expand, and the number and variety continue to enrich, but China's generic drug industry as a whole is still facing a large but not strong situation, in the increasingly fierce international pharmaceutical market competition, how to make the best response according to the current environment? How to increase international influence? How to accelerate the development of industrial agglomeration? How to promote the transformation of pharmaceutical companies into innovative companies or large-scale companies with generic drugs? India's successful experience deserves full reference
.

Looking at the world, the development of generic drugs is the basis for
most developing countries to establish a pharmaceutical industry system.

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