chapter – 1 - shodhganga : a reservoir of indian theses...
TRANSCRIPT
CHAPTER – 1
INTRODUCTION
1.1 HISTORY
1.2 PROFILE OF PHARMACEUTICAL INDUSTRY
1.3 SWOT ANALYSIS OF PHARMACEUTICAL INDUSTRY
1.5 NON-STEROIDAL ANTIINFLAMATORY DRUGS( NSAID’S)
CHAPTER - 1
1.1 HISTORY
Indian economy is one of the fastest growing economies in the world. Its GDP
growth rate at 9.2%and GDP of Rs 177000 crore is the 12th largest economy in the
world.
The speed of India‘s industrialization is measured as the second fastest in the world.The Pharmaceutical sector is one of the major industries in our country, and among
the most organized sectors. The industry plays an important role in promoting and
sustaining development in the field of global medicine.
A burgeoning healthcare market and a resultant window of opportunities have set the
stage for rapid expansion of the Indian pharmaceutical industry. The pharmaceutical
industry is already growing at a rate of 9% p.a. which is expected to rise further in the
years to come.
Indian companies have also developed a considerable service industry for the global
pharmaceutical market .Indian pharmaceutical companies are able to provide FDA
approved facilities for the complete range of services for drug development, R&D
services, API sourcing, finished formulation manufacture and clinical trials can all be
completed in India, at less cost than in many developed markets.
Leading Indian pharmaceutical companies are also beginning to increase market
presence and market share in the US and EU markets .Global pharmaceutical
companies have already begun to take advantage of the changing regulatory and
economic conditions in India. It is estimated that the coming years will see further
mergers and acquisitions including key overseas acquisitions.
-1-
INDIAN ADVANTAGE
Thanks to low costs, qualified staff and extensive production and research units, India
is becoming more and more of a major pharmaceutical location. Among Asian
countries India‘s pharmaceutical industry ranks fourth but has lost market share toChina as sales growth there has been nearly twice as high sales volume nearly four
times higher than in India.
Indian pharmaceutical industry currently comprises about 20,000 licensed companies
employing approximately 500,000 people. The Indian pharmaceutical industry
produces a total of about 70,000 different drugs, which is higher than that produced in
Germany. Demand in India is growing markedly due to rising population figures, the
increasing number of old people and the development of incomes. As a production
location the country is benefiting from its wage cost advantages over western
competitors also in terms of production of medicines.
The generics market will grow in both the developed countries and in the emerging
markets. Most vital medicines are already exempt from patent protection. The
manufacture of generic drugs in that segment is growing strongly. In addition patents
for higher turnover drugs with a volume of 100 Bn Euros will expire in the next few
years .Of these drugs, roughly one-third will likely be produced by Indian companies.
In the coming years Indian drug makers will likely continue to look to foreign
countries to expand their operations. According to PWC about half of all larger Indian
drug makers are looking to expand abroad through take—overs the targeted markets
being the US and Europe.
According to study by FCCI—Ernst & Young India will open a probable US $ 8
billion market for MNCs selling expensive drugs by 2015. The domestic
pharmaceutical market is likely to reach US$ 20 billion by 2015. The Retail
pharmaceutical market is likely to cross US $ 13 billion by 2012.
-2-
1.2 PROFILE OF PHARMACEUTICAL INDUSTRY
History
Since ancient times, two systems of medicine were present in India. First was
ayurvedic medicine, which was the vedic period. Ayurveda depends largely on the
combination of various herbs, minerals and metals like gold, copper etc. Second was
the Arabian system of medicine. brought to India by no of invasions. However
Allopathic and Homeopathic were the two systems of medicine in the western part of
the world.
Even though Ayurveda was advanced it did not become popular due to a long British
rule and development of medical education based on typical ―British model.Allopathic/Modern medicine took root in India and all research and development was
on Allopathy. There was no research and development in Ayurvedic medicine even
though the government made efforts to promote ayurveda.
Origin of the Indian Pharmaceutical Industry
It Originated in the nineteenth century when medicines were imported by the British
for their personal use when they came to India to do business. When the British took
over India the imports became a regular feature.
Pharmaceutical products were imported mainly from United Kingdom and Germany.
The pioneering efforts of Acharya P.C. Ray led to the establishment of Bengal
Chemical and Pharmaceutical Works with the Indigenous production of medicines in
nineteen thousand and one.
The period after one thousand nine hundered and four saw the establishment of four
research institutes in India namely the Hafkine Institute, King Institute, Central
Institute and Pasteur Institute.
Domestic production of pharmaceuticals like manufacture of caffeine and surgical
dressings started during First World War but after the war imports started and Indian
industry could not survive due to competition from imports.
-3-
Manufacture of Tetanus antitoxin a basic drug was started by the Bengal Chemical
and Pharmaceutical Works in one thousand nine hundred and thirty but it could meet
only twelve of medical requirements.
The Second World War played a significant role in the history of pharmaceutical
industry leading to increase in capacity expansion. By one thousand nine hundred and
forty two pharmaceutical industry took up manufacture of drugs like ephedrine,
codeine, and quinolines and production of chemotherapeutic drugs. Bulk drugs were
imported and converted into formulations increasing manufacture of pharmaceuticals.
At the time of independence the pharmaceutical industry was nascent and could not
make much progress due to lack of government support. The turnover of the
pharmaceutical industry in nineteen forty seven was in the range of nine to ten crores.
POST INDEPENDENCE PERIOD
The Government of Independent India outlined a planned economic expansion about
four decades ago ,at that time the development of the Indian pharmaceutical industry
was not adequate with the size of the country or the growing needs of the population.
Since the post independence period the growth of the pharmaceutical industry in the
country has been substantial and can be termed as ―RADICAL‖.
RADICAL GROWTH
The Indian pharmaceutical industry is driven by knowledge skills, low production
costs, and quality. Due to this there is demand from both domestic as well as
international markets.
This has resulted in a robust growth of around fourteen percent since the beginning of
the eleventh plan in 2007, from about rupees seventy one thousand crores to over
one lakh crores in 2009-10 comprising rupees sixty two thousand and fifty five
crores of domestic market and exports of over rupees forty two thousand one hundred
and fifty crores
-4-
The combination of a strong knowledge base and cheap labour has transformed India
into a powerhouse in the global pharmaceutical market. Having established a strong
position by manufacturing generic drugs, the industry is now moving up the value
chain.
According to the research by the Associated Chambers of Commerce and Industry
(ASSOCHAM) the Indian pharmaceutical industry is projected to achieve a turnover
of $ twenty billion by 2015 making India one the world‘s top ten pharmaceuticalmarkets.
COMPOSITION OF THE PHARMA SECTOR
The pharmaceutical industry is rightly called as Life saving industry. It plays a major
role in the suffering of millions of people regulating various ailments that affect
human beings. Hence Pharmaceutical industry after independence has been
considered as the industry which forms a driving force for the growth of the country.
The current Indian pharmaceutical sector has three main units
1. The public units
2. The Indian units
3. The foreign units
The organized sector which is about two percent of the total no of manufacturing units
accounts for about seventy percent of the total value of drug production whereas the
remaining ninety eight of the units accounts for only thirty percent of the total
production value of the formulations in the country.
PRODUCTION
The industry is quite fragmented and comprises of nearly ten thousand five hundred
units with majority of them in the organised sector. Of these about three hundred to
four hundred units are categorised as belonging to medium to large organised sector
with the top ten manufacturers accounting for thirty six percent of the market share.
-5-
As regards the BULK DRUGS component of the industry the market is around
Rupees forty thousand crores giving it a share of around fifty percent of the total
domestic market. This gives the Indian Bulk Drug Industry a share of about nine
percent of the global bulk drug market.
EXPORTS
India is among the top twenty pharmaceutical exporting countries and the exports
have grown very significantly at a CAGR of around nineteen percent in the eleventh
plan period. Indian drugs are exported to around two hundred countries in the world
with highly regulated markets of USA, UK and Far East Countries.
The industry is ranked third globally in volume and fourteenth in value supplying
around ten percent of the total global production. This also amounts to around twenty
nine percent of total volume of global generics. Thus every fifth Tablet, Capsule and
injectable in generics drugs consumed anywhere in the world is manufactured in
India.
RESEARCH AND DEVELOPMENT
The R&D expenditure was estimated to be around Rupees four hundred and ninety
seven crores during two thousand three which is about two percent of sales. There
are eighty drug units with in-house R &D facilities approved by the Department of
Science and Technology, Government of India. In developed countries,
pharmaceutical companies spend about ten to twenty percent of sales on R & D.
There are about a dozen companies in India which spend more than Rupees hundred
lacs per annum on R&D
PRESENT STATUS
TECHNOLOGY
Technology is of MAJOR importance to the pharmaceutical industry. After
Independence there has been heavy import of technology into India.
-6-
The imported technology was suited to local conditions and improved upon in most
cases by Indian scientists.
Such improvements made Indian pharma companies export bulk drugs &
formulations to developed countries like U.S, Germany, U.K., Switzerland, Canada
and Australia .due to which the Indian pharmaceutical industry has gained net-
exporter status. There are still major areas where India needs technological know-how
for the pharma industry vis-a vis pharma industry of the developing countries.
DRUG SYNTHESIS
The FIRST drug discovered in India was urea stibamine in nineteen hundred and
twenty two. The second drug methaqualone was synthesized at the Regional Research
Laboratories of Hyderabad. Pharmacological studies were conducted on this at
Lucknow and this was developed commercially developed in the U. K.
The third drug was Haymycin an antibiotic developed by Hindustan Antibiotics Ltd, a
public sector undertaking. The fourth drug enfenamic acid was synthesized at the
Regional Research Laboratories, Hyderabad and was marketed by Unichem under the
brand name Tromaril.
Ciba-Geigy marketed the fifth drug an anti-depressant by name Sintamil. Compared
to this the six developed countries Italy, West Germany, France, the U.K. the U.S.A.
and Japan had introduced as many as two thousand five hundred and sixty seven new
drugs during the ten year period between 1970-80. During the same period as many as
six thousand three hundred and seventy four new compounds had undergone clinical
trials.
The Indian pharmaceutical industry could not introduce more than a handful of drugs
in the last forty years, the reason being
-7-
The expenditure aspect: The prohibitively high cost of new drug discovery is
the first and foremost reason. It is estimated that a new drug discovery (from
concept to commercialization ) would cost on an average about US $850
Million, with a gestation period of ten to twelve years.
Low down revenue fringe: Large international pharmaceutical companies
spend about 10 to 20% of their annual sales volume on R & D. Most
pharmaceutical companies in India would consider themselves fortunate and
successful if they could make 10% as net profit before tax (NPBT).
o R &D expenditure in India therefore is around an insignificant two
percent of the sales volume of the larger companies. Much of the
R &D is concerned with ―Process Innovation‖ rather than new drugdiscovery.
Scarce economic encouragements: Thirdly the fiscal incentives provided by
government are hardly adequate to support the high cost of R & D and the risk
of uncertainty. The incentives currently offered are :
o A seven year patent protection and a five-year period of exemption
from price Control. The patent protection one will observe is much less
than the gestation period of a new drug.
o The five year exemption from price control is hardly adequate to earn a
decent return on the time and money spent on R & D for a new drug.
Some fiscal incentives for the promotion of R & D by the Dept. of Science and
Technology as a part of promoting and supporting indigenous technology are:
Capital expenditure on R & D can be written off in the income
tax return for the year in which it was incurred
-8-
Weighted deduction, for income tax purposes of one third of
the amount paid to an approved scientific research association
or a university or college for undertaking scientific research
under an approved programme.
Weighted deduction for income tax purposes of 125 % of the
expenditure incurred for in-house scientific programmes
approved by the Department Of Science and Technology.
BROADENING THE PERSPECTIVE
The rate of obsolescence among certain drugs is very fast resulting in a technology
bias in the pharmaceutical industry the world over. Hence the pharmaceutical industry
is technology driven.
The rate of product obsolescence can be observed from the fact that about seventy per
cent of the drugs commonly used today were nonexistent about thirty years ago.
No single country developed from its domestic sales, can meet the high cost and risk
of failure of R &D for developing new drugs. A new drug has to be marketed globally
which explains the increasing trend in technology trade.
India‘s expenditure on Technology is only tiny fraction of that of even developingcountries like Brazil and Mexico.
The basic need now is to shift the focus of our development efforts from a creation of
additional capacities with outdated techniques to enhancing the technological levels of
the various sectors of our industry. The shift in emphasis cannot be brought about,
without substantially broadening our perspectives on the question of technology
transfer.
-9-
CLUSTER OF INCONSISTENCIES
The Indian pharmaceutical industry has a probing cluster of inconsistencies.
Inconsistency 1: Restricted prices and Costly drugs
The industry has been subjected for more than two decades to an increasingly
stringent system of price controls currently covering about four-fifths of its
production of drugs and formulations but the impression is still persists that the prices
of medicines are on the higher side.
Inconsistency 2: Metropolitan Industry
In spite of the dramatic progress and the growth over a sixty year period the benefits
of modern medicine have not reached about two-thirds of the population effectively.
The pharmaceutical industry in India even today seems to be urban-oriented.
Inconsistency 3 : Fitness concern trade not at your best
In spite of the pharmaceutical industry‘s impressive overall growth the industrywhich produces drugs and formulations for the health of the people is not really
robust.
The per capita availability of pharmaceuticals in India continues to be among the
lowest in the world a mere rupees thirty per year and the average for the rural areas is
less than rupees ten. Which is just four percent of what the United States spends on
pharmaceuticals, eight percent of the UK‘S per capita consumption and only twopercent of what an average Japanese spends on medicines. Even Mexicans seem to
spending more than four times on pharmaceuticals as compared to their counterparts
in India.
Inconsistency 4 :Uundersized range on a outsized range
Maintenance of high quality standards in the production of both bulk drugs and
formulations is of utmost importance. Any laxity or compromise in the quality of
drugs may spell the difference between life and death.
-10-
It is common knowledge that many small scale manufacturers do not have technically
qualified competent manpower necessary to ensure quality control. They are also not
in a position to meet the conditions required for Good Manufacturing Practices(GMP)
Many experts feel that pharmaceutical production does not lend itself to small scale
operations , but still in the recent years there has been a significant increase in the
production of formulations by the small scale sector.
Inconsistency 5: Propagation of trademark or Mechanized division
There are too many brands, which are not necessary and this propagation of trademark
is leading to wastage of productive capacities which could have been used effectively
for some other essential products. This also results in unhealthy competition between
too many brands. It is more of the propagation of manufacturing units in the small
scale sector that is leading to ever increasing similar brands.
Inconsistency 6: Control on amount produced, but no control on effort
The introduction of the Drug Price Control Order of nineteen sixteen nine and the
subsequent Drug Price Control Orders have been a major setback for the
Pharmaceutical Industry.
What is peculiar to pharmaceutical price control is that while the prices of raw
materials as well as finished products are controlled, there is absolutely no control
whatsoever on the input costs.
The input costs seem to be ever increasing. As a result the mark-ups provided in the
essential product categories are lower than the breakeven points. Also there is a
ceiling on the profitability of the manufacturing units.
Inconsistency 7 : Licensing policy or silencing policy
The Industrial licensing policy in the pharmaceutical industry contains some policies
which have reduced the growth of the pharmaceutical industry instead of stimulating
the growth ,some of them are as follows.
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Reservation of some essential bulk drugs for the less efficient public sector
Preference given to small scale sector which cannot hope to achieve the
economies of large scale manufacture.
Fragmentation of capacities for bulk drug manufacture that is inherent in the
licensing policy itself. Bulk drug to formulation ratio parameters of one to
five or one to ten virtually force every manufacturer in the organized sector
to take up bulk drug production, irrespective of efficiency of operations and
consequent cost-effectiveness.
Delay, rejection and other roadblocks created in the way of issuing licenses
to FERA, and MRTP companies which have the ability to speed up large
scale manufacturing cost effectively.
THE PHARMACEUTICAL MARKET
The dimensions of the pharmaceutical market
1. The demographic dimension: This consists geographical proximity of the
customers and their shared socio-economic characteristics like age, income,
gender, education and size of the family.
2. The generic dimension: This consists of the general equivalents existing in a
number of formulations. E.g. all formulations having rifampicin will add up
to the total rifampicin and not to the anti-TB market.
3. The therapeutic dimension: This consists of all the products whose aim is to
relieve, treat, and cure the same symptoms or disease. For e.g all products
aimed at relieving, treating, and curing asthma come under the anti-asthmatic
therapeutic group.
-12-
4. The competitive dimension: Rather than the size of the market, the extent of
competition that is the no of competitors, their market share, and their growth
rate play a very important role in finding the attractiveness, or unattractiveness
of the market. For example introducing another antibiotic may not be very
attractive even though the market size may be large because to many brands in
a crowded market will compete with each other and its growth rate may then
may also turn out to be very low. If one have something special then only one
should think of entering the market. Regular monitoring of the competitors
activities is very essential for success in the market place.
5. The Timing: It is the most important dimension. All those who have been
successful in various therapeutic groups are those products which were
introduced at the right time. It is not good to have a good product you should
be there in the market with your best product and best benefit package at the
right time. The firsts‘ with the moistest is the one who succeeds in the market
place. Timing is also very important for planning product deletion and
harvesting strategies. One should also be aware of the stage and rate of
product obsolescence in the market place. Research indicates that the
probability of success is greater if you are one of the first three to enter the
market, in any THERAPEUTIC CATEGORY. The early bird really catches
the worm.
PHARMACEUTICAL MARKET SEGMENTATION
In order to segment the pharmaceutical market one has to be aware of the features of
pharmaceutical marketing .
1. You reach the end-consumer(patient) through an intermediate customer(the
physician who prescribes the drug)
-13-
2. Segmentation in pharmaceutical marketing is of two steps
The first step of segmentation is at the consumer level (the patient)
The second is at the consumer level (doctor), whether he is a general
practitioner or a specialist or a hospital doctor he is the influencer.
Patients (consumers or end-users)
Patients with similar illness falling under the same therapeutic group,
eg. asthmatic patients, diabetic patients, tubercular patients etc.
Patients depending on the stage at which the disease is progressing eg
acute or chronic asthma, mild or moderate hypertension.
Patients according to their age groups, eg, Pediatric patients, geriatric
patients etc.
Patients segmented according to gender eg, male and female patients.
Doctors (intermediate-customers, who are influencers
Doctors according to their age group
Doctors according to their specialty eg. surgeons, gynecologists, cardiologists,
pediatricians, dentists etc.
General practitioners who treat mostly patients with a particular
illness, common diseases, minor ailments etc.
Doctors according to their place of practice e.g urban, rural,
govt., Hospitals primary health centers, private nursing homes
etc.
Doctors according to the type of practice eg. prescribing
doctors, Dispensing doctors, etc.
Doctors according to their usage rate eg., heavy users, light
users, non-users, past users etc.
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PHARMACEUTICAL MARKET TRANSACTIONS
PATIENT
GP PRESCRIPTIONS
HOSPITAL DOCTOR
NURSES
PHARMACISTRETAIL CHEMIST
PHARMACISTRETAIL CHEMIST
PATIENT
The Pharmaceutical marketer by using segmentation strategy creatively can
Clearly identify the target group
Focus the promotional effort to maximize gains cost effectively
Create a strong positive product image to offset competition.
MARKET DIMENSIONS
To study the profile of your market, one has to view the market from all possible
dimensions.
The size of the geographical market
State wise or district wise
How much does each state contribute to the All India Market?
What is the rate of change?
Information is needed both in terms of volume, value and the number
of prescriptions generated
The size of the market by therapeutic group
-15-
Therapeutic group wise contribution to pharmaceutical market
in terms of volume, value and the number of prescriptions in
each therapeutic group.
Region wise contribution for each therapeutic group.
The rate of change.
The size of the market by demographics of consumers that is the number of
patients treated with demographic details like age-group, gender, location of
treatment and income ,education levels etc. AND the customers that is doctors
by age-group, gender, location, type of practice, specialty etc.
The size of the Prescription Market that is the number of prescriptions written
in each sub-therapeutic group of the major therapeutic category.
The size of the competition
It is the number of competitors operating in each segment,
region, with their share of the total market, resources, strengths
and weaknesses along with the benefits and promotion offered
by major competitors.
SIZE of the MARKET by VOLUME
The dealer network i.e. the distributors /stockiest and retail
chemists
according to the volume of their purchases like low, medium,
heavy and by location.
The SIZE of the Institutional market
The institutional market by nature, frequency, volume and type
of purchases and by location.
-16-
Do they invite annual tenders or call for periodical rate
contracts?
Which key people are involved in the decision of buying?
What are the selection criteria?
The most important way of segmenting the Pharmaceutical Market is by the various
therapeutic groups. Major therapeutic groups are as follows:
Sr no Therapeutic groups1 Antibiotics
2 Anti peptic ulcerants
3 Cardiac therapy
4 Analgesics
5 Anti diabetic therapy
6 Cough and Cold Preparations
7 Anti rheumatic, Norm-Steriodal Anti Inflamatory
8 Anti Asthamatic therapy
9 Vitamins
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1.3 SWOT ANALYIS
The Indian Pharmaceutical industry today is a leading low cost high quality generic
medicines supplier to the world. Its future growth depends on several aspects of its
strengths, weakness, opportunities and threats
STRENGTHS
1) Strong low cost manufacturing sector
In Comparison to the European and US pharmaceutical industry the Indian pharma
sector has the strength of
a) low wage costs
b) low material costs like the bulk drugs and the chemical intermediaries required
to manufacture the bulk drugs as well as the chemicals that go into the
manufacture of formulations.
c) lower cost of living.
Manufacture of drugs in India is fifty percent cheaper than in the western countries.
The Indian pharmaceutical sector has ten thousand five hundred manufacturers in the
country comprising about three large and medium units and remaining in the small
scale or unorganised sector.
The thrust on generics and the existence of the process patent only in the period 1970
and 2005 helped the small and medium sector to grow enabling India to source more
than eighty five percent of its domestic demand for bulk drugs and drug intermediates.
After liberalization the contribution of the public sector decreased in an increasingly
commodity market. The major two fifty pharmaceutical companies control seventy
percent of the market, while the market leader holds a seven percent market share.
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2) Competitiveness of Indian Generics
The major advantage of the pharma industry is its exports which is maintained by the
increased competitiveness of the industry compared to the developed and regulated
markets which is seen in the vast number of Abbreviated New Drug
Applications(ANDA) and First to File (FTF) fillings for the formulations sector and
Drug Master Files (DMF) fillings for the bulk drugs by the Indian companies in the
USFDA for exports to US market which was US $ three hundred and six billion in
two thousand and nine.
In two thousand and ten more than thirty percent of DMF approvals by USFDA were
from India clearly showing the competitiveness of the Indian pharmaceutical as
compared to other leading generics producers like China, Israel and Germany.
India is estimated to have around four hundred and sixty one Certificate of
Suitability which is about twenty percent of the total granted by European Directorate
of Quality Medicine and the products registered by India vary in complexity and
range of therapeutic areas.
3) Human Skill
Availability of human resources in India has the following:
High knowledge in engineering and science
Highly motivated scientists and lower innovation cost
Huge pool of English speaking employees, which is a comfort zone for
international customers and regulatory agencies.
Low cost scientific pool on the shop floor leading to high quality documentation
and understanding of the process
Service culture for Outsourcing.
-19-
The largest number of USFDA plants outside US are in India. During the last five
years there has been an increasing demand for contract research and clinical trials
from the multinationals
Weakness
1) Low R&D Budget
Even though the India pharmaceutical industry is large by Indian standards, in the
world market its share is only about two and half percent. The investment in
Research and Development by major Indian pharmaceutical companies is about
eight and half percent of their sales turnover, which as a percent of total production
works out to about four and half percent of the total production compared to eight
percent in the developed markets.
In India the emphasis on R&D is more an issue of access to public health
infrastructure and low cost medicines and not a requirement and disease control. The
R&D budget of the total pharmaceutical industry is small compared to the global
competitors.
Thus individuals R&D budgets of many US companies are much more than the
cumulative R&D budgets of all the companies in India. Also the problem of R&D
investment increases due the lack of supportive funding from the government which
has been possible in competing countries like Israel, Malaysia and Singapore.
2) Inadequate Infrastructure
There is a weakness in basic infrastructure like power, roads, and the lack of
advanced labs and infrastructure for drugs testing along with smaller capacities as
compared to countries like China and Israel which have huge capacities resulting in
lower cost of production. The Indian pharmaceutical industry has to develop good
infrastructure for its survival.
-20-
3) Diffused industry structure
Diffuse nature of the Indian pharmaceutical industry where about twenty to thirty
companies are large enough to bear the transaction costs associated with sustained
production including exports considering the stringent compliance entry regulations
of the developed and emerging markets.
4) Poor industry academia interaction
It is observed that there is lack of strong linkages between academics and industry
which is essential for the growth of the industry.
5) Limitations to domestic market size
Limitations in growth of the domestic market size due to constraints of low medical
and healthcare expenditure in the rural areas of the country.
6) Inadequate overseas marketing infrastructure
Indian companies lack in global marketing work force due to constraints of surplus
capital and increasing expenditure cost required to dominate the global markets.
7) Lack of regulatory infrastructure
Delays by the Central Drugs Standards and Control Organisations (CDSO) for
timely clearance for new drug trials, lack of drug inspectors, at the centre and the state
levels in the Food and Drug Administration is a major hindrance in the smooth
growth of the industry.
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OPPORTUNITIES
1) Generics
According to the Mckensey report of the department of Pharmaceuticals US$ Three
hundred billion are expected to go off patent by 2015 for conventional molecules .
Considering factoring for the reduction in price and market value from patent to
generics this is projected to be at least thirty to thirty five percent which works out to
US$ hundred billion.
Compulsory licensing provisions negotiated in the Doha round allows for countries to
import cheaper generics versions of patented drugs in the interest of public health.
Thailand and South Africa having started such initiatives will be beneficial to India.
Historically, small molecule drugs dominated therapeutic areas such as cardiovascular
and central nervous system conditions and contributed to significant growth. Of late
these markets are saturated with me-too drugs and also suffer from rapid market
erosion because of the influx of generic drugs after the patent expirations of key
brands.
At present pharmaceutical companies are shifting their R&D focus toward developing
novel therapies for the treatment of niche indications which should ensure longer-term
growth. Examples of target therapy areas are oncology, immunology, and
inflammation.
The target markets of oncology, immunology, and inflammation will experience the
highest sales growth and become the principal growth drivers for the top 50 pharma
companies totally generating an additional $ forty five billion by 2014
-22-
2) Big Pharma will remain dependent on small molecules, but biologics will spur
growth
Big pharma business was essentially built on small molecule products that are
relatively inexpensive to develop and manufacture, thus allowing companies to
concentrate on fuelling growth along with a aggressive sales and marketing strategy.
But once patent protection is lost, small molecules are easy for generics drugs
companies to manufacture, as they do not have to support big R&D teams and are
able to compete on price.
The commoditization of the small molecule market has forced the Big pharma players
to seek diversification into other areas.
3) India –an attractive destination for Contract Manufacturing Research
With the global pharmaceutical industry at the cross roads and with many of the
block bluster drugs getting off-patented along with increasing R&D costs, companies
have found recourse to outsourcing some of their research and manufacturing
activities and saving cost in the process.
This has lead to the growth of contract research and manufacturing services or
CRAMS making the Indian companies to rejoice. Business of CRAMS has come as a
boon to India taking full advantage of the features enjoyed by India as a country of
diverse origin and strong manufacturing base in pharmaceuticals for many decades
India could capture ten percent of the global CRAMS market of almost US$ twenty
thousand billion by 2012. Overall the CRAMS segment is expected to grow thirty to
thirty five percent per annum on top of a growth of about forty five percent in the
coming years.
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4) Clinical Trials Industry
The pressures of declining R&D output and increasing costs has resulted in the
globalization of clinical research and emerging markets have begun playing a
significant role in the drug development value chain. India too has seen a surge in
clinical research activity and emerging markets like India are a strategic imperative
for good clinical research.
India is one of the fastest growing clinical research destinations with a growth rate
that is two and a half times the overall market growth.
The number of investigators in India has also grown the fastest among Asian, Latin
America and Eastern European countries with a forty five percent CAGR between
2002 and 2008.India has one of the latest subject recruitment rates globally with
screen failure and drop rates lower by nearly fifty percent as compared to global
averages.
India contributes twenty to thirty percent of global enrolment in multi-centric studies
where it is a participant. India is ranked third across all countries after the USA and
China in terms of its overall attractiveness as a “clinical trial” destination according
to a recent AT Kearney global survey.
India‘s clinical research landscape is undergoing a glorious metamorphosis aided bymany uniquely differentiating capabilities, a rapidly transforming health care market
and an enabling environment that is rapidly adopting itself to global standards
The Clinical Establishment (Registration and Regulation ) Act, which is being
implemented by the government to regulate private hospitals and laboratories across
the country , will play a significant role in devising and implementing standards of
facilities/services and further enhance the quality of care provided by the Indian
health care delivery system.
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India has significant valid population to participate in clinical trials and the country
also has proven capabilities in medical skills, hospital beds, and IT capability. This
offers an opportunity to capture the market share in global clinical R&D market such
as clinical trials, data management, testing etc.
Cost of clinical trials in India are about one tenth of their levels in the US.
Currently, India is experiencing a growing number of collaborations between Indian
and foreign firms in the domestic market, especially involving the biotechnology
sector, in a wide variety of areas such as collaborative R&D including drug
discovery and clinical trials.
5) IT in Pharma R&D
There has been a growing importance of IT in the pharma sector. Although pharma
industry is a life saving products and health care industry it has been a slow and late
implementer of IT tools. Use of IT can help in
1)Data analysis for molecular screening
2)Clinical research data management(CDM)
3)Animal modeling
4)Biomarkers for safety and effectiveness
5)Bio-statistics
6)Bio-informatics
7)Genome research
8)Process implementation in terms of enterprise resource planning,
regulatory submission.
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THREATS:
1) Formulations Sector
The generics market in developed countries is being currently affected by a
number of factors;
a) Growing strategy of MNCs to protect market loss due to expiry of
patents
b) Increased competition to countries like India from manufacturers in
China and East Europe not only from the manufacturing point of view
but also barriers being raised by them to protect and develop local
industry, which is being done by such processes as long approval time
and costs for registration of drugs.
Insistence on completing long process for registration for drugs
registered earlier by way of specific requirements of fresh clinical trials.
c) Key markets like the United States are entering into a number of Free
Trade Agreements with different countries with intent to contain Indian
exports
d) Prevention from bidding for government contracts as US permits bidders
only from countries that are signatories to WTO Agreement on
Government Procurement.
e) Submission of separate state level applications for marketing drugs in
the United States as there is no nation wide system of application even
where Food and Drug Administration approval has been received.
(2) Bulk drug industry
Stiff competition from China on the costs front has led to the Indian Bulk
Industry particularly the Fermentation Industry to a stage of closure due
to various factors including subsidized power and finance costs in the
computing country. As a result no company in India is manufacturing
antibiotics like Penicillin and Erythromycin etc.
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1.4 NON-STEROIDAL ANTI-INFLAMMATORY DRUGS (NSAID‟S)
Anti-inflammatory drugs are used to reduce inflammation and pain. This class of
drugs is used clinically in the treatment of musculo skeletal disorders such as
rheumatoid arthritis, osteo arthritis , ankylosing spondylitis, headache, sports injuries,
and menstrual cramps. These drugs are also employed as analgesics against ―PAIN‖
Prostaglandins are a family of chemicals that are produced by the cells of the body
and have several important functions. The promote inflammation, pain, and fever
support the blood clotting function of platelets, and protect the lining of the stomach
from the damaging effects of acid .
Prostaglandins are produced within the body‘s cells by the enzyme cycloxygenase(COX). There are two COX enzymes COX 1 and COX 2. Both enzymes produce
prostaglandins that promote inflammation, pain, and fever. However the COX 1
produces prostaglandins that supports platelets and protect the stomach.
NSAID‘S block the COX enzymes and reduce prostaglandins throughout the body.As a consequence ongoing inflammation, pain, and fever are reduced.
TREATMENT OF INFLAMMATION:
1) INFLAMMATION PROCESS:
Inflammation is a rational response of tissues to any kind of insult they suffer. It is
a complex action on the part of tissue affected involving series of cellular and
vascular changes.
All the phenomena observed right from the time of insult to the time of either
complete repair or death of the tissue from the process of inflammation can be defined
as a natural and complex series of cellular and vascular responses
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(a)The insult tissue might encounter can be from
(i) physical agents like nail, thorn, electrical shock, fire, or even surgeons
Knife or radiation from X-ray therapy or in space flight
(ii) chemical agents like acids, alkalies, drugs ingested or inhaled or
biological agents like microorganisms causing infection.
The five cardinal signs of inflammation are
Ruber (redness)
Dolors (Pain)
Calore (Rise of temperature locally)
Tumore( Swelling )
Functionlaesa (loss of function)
(b) The natural purpose of inflammatory process is
(i) to hold in check the extension of injurious effects of the insulating
agent on body tissues
(ii) to hold in check the degree of damage to the tissues affected by the
insulating agent and those involved in this process.
(iii) to remove and destroy the insulating agents
Thus inflammatory process is part of protective phenomenon. It may however cause
more damage to the tissue than the direct effect of the causative agent. It is here
where the rationality of anti-inflammatory drugs comes into play.
ANTIINFLAMMATORY AGENTS:
The basic purpose of inflammatory process is to reestablish at the end, the normalcy
of the tissue attacked. It is to this end that the anti-inflammatory therapy should be
aimed. Thus anti-inflammatory drugs can help by
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a) reducing vasodilation and there from the resultant edema, which is a normal
immediate response to the injury.
b) reducing connective tissue proliferation which is normal long term response to
injury.
c) reducing the undesirable symptoms of the underlying disease.
ANTIINFLAMMATORY THERAPY:
The inflammatory response is based upon the controlled interplay of numerous
functions and performances of the cells and tissues involved. The individual
mechanism of this response may get modified quantitatively and occasionally even
qualitatively. An essential aspect of this reaction is its apparent tendency to
reestablish the status quo i.e. the equilibrium of normal tissue.
The aim of anti-inflammatory therapy is to favour this process of recovery by
influencing partially the functions as well as regulatory mechanism. The various
physio-pathological processes concerned with the anti-inflammatory response offer
many points of impact as to the anti-inflammatory so that there is some justification in
ascribing the therapeutic efficacy of these agents to the peripheral action within
the inflammatory focus.
As is evident from clinical experience it is possible to obtain considerable
improvement and even recovery in inflammatory conditions by a drug
induced inhibition of the inflammatory response.
Anti-inflammatory drugs have actually been developed to do any of the
following:
Reduce vasodilation (erythema) and edema the immediate short term response
to injury
Reduce connective tissue proliferation the normal long term (repair) response
to injury.
Reduce the undesirable symptoms of the underlying disease.
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The following are the fast moving anti-inflammatory drugs in the pharmaceutical
market.
1) IBUPROFEN
Ibuprofen is the first drug of the propionic acid derivatives that was permitted for
clinical trials.
Ibuprofen exhibits analgesic, fever reducing and anti-inflammatory action
It is used in treating rheumatoid arthritis, in various forms of articular and non-
articular rheumatoid arthritis, as well as pain resulting from inflammatory peripheral
nerve system involvement, nueralgia, myalgia, ankylosing spondylitis, inflammatory
diseases of the ENT organs, adnexitis, dysmenorrhea, and for headaches and
toothaches.
Ibuprofen is 2-(4-iso-butylphenyl) propionic acid and is synthesized by the
chloromethylation of iso-butylbenzene giving 4-iso-butylbenzylchloride.
This product is reacted with sodium cyanide making 4-iso-butylbenzyl cyanide which
is alkylated in the presence of sodium amide by methyl iodide into 2-( 4 - iso-
butylbenzyl) propionitrile . Hydrolysis of this resulting product in the presence of a
base produces Ibuprofen
2) NAPROXEN
It also belongs to the class of propionic acid derivatives.
Naproxen exhibits analgesic, fever reducing , and long lasting anti-inflammatory
action. It causes reduction and removal of painful symptoms including joint pain,
stiffness and swelling in the joints.
Naproxen is 2-(6 methoxy -2-naphthyl) propionic acid and it can be synthesized
from 2-acetylor 2-chloromethyl-6-methoxynaphthalene.
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3) DICLOFENAC
It belongs to the class of acetic acid derivatives that are widely used as anti-
inflammatory, analgesic, and fever reducing compounds.
Diclofenac is 2-((2,6-dichlorophenyl)-amino)-phenyl acetic acid and is synthesized
from 2-chlorobenzoic acid and 2,6-dichloroaniline. The reaction of these in the
presence of sodium hydroxide and copper gives N-(2,6-dichloro phenyl) anthranylic
acid, the carboxylic group of which undergoes reduction by lithium aluminum
hydride. The resulting 2-((2,6-dichlorophenyl)-amino)-benzyl alcohol undergoes
further chlorination by thionyl chloride into 2-((2,6dichloro phenyl)-amino)-
benzylchloride and further upon reaction with sodium cyanide converts into 2-((2,6-
dicholorphenyl)-amino)benzyl cyanide. Hydrolysis of the nitrile group leads to
diclofenac.
Diclofenac is used in acute rheumatism, rheumatoid arthritis, osteoarthritis
ankylosing spondylitis ,arthrosis,back pain,neuralgia,and myalgia.
4) MEFENAMIC ACID
It belongs to the class of Anthranylic acid derivatives.
Mefenamic acid, N-(2,3xylyl)anthranilic acid is synthesized by the reaction of the
potassium salt of 2 –bromobenzoic acid with 2,3-dimethylaniline in the presence of
copper acetate.
It is mainly used for moderate pain and dysmenorrhea.
5) PIROXICAM
It belongs to the class of Oxicames,whose mechanism of action are most likely the
supression of prostaglandin synthesis.
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Piroxicam is 1,1-dioxid-4-hydroxy-2methyl-N-2-pyradyl-2H-1,2-benzo
thiazine-3-carboxamide
Piroxicam is synthesized by reaction of a 3 carboxylic acid ester(methyl ester)
with 2 Amino pyridine.
It is used in acute rheumatism, osteoarthritis, back pain neuralgia, and myalgia.
6) NIMESULIDE
It is a relatively COX-2 selective nonsteroidal antiinflammatory drug with analgesic and
antipyretic properties.
Its approved indications are in the treatment of acute pain, the symptomatic treatment of
osteoarthritis and primary dysmenorrhea in adults.
It has a multifactorial mode of action and is characterized by a fast onset of action.
Nimesulide is 4 Nitro 2 phenoxy methane sulphonanilide.
Its synthesis involves chlorintation of benzene using aluminum chloride to ortho and para
chloro benzene ,nitration using nitric acid and sulphuric acid and seperation of ortho
chlorobenzene which is treated with phenol and caustic potash the resultant product
obtained is reduced with hydrogen in presence of palladium to give methane sulfonic
anhydride which on nitration with nitric acid in the presence of glacial acetic acid gives
Nimesulide.
7) LORNOXICAM
It is a non steroidal antiinflammatory drug of the oxicam class with analgesic,
antiinflammatory ,antipyretic properties. It is available in oral and parenteral formulations.
Lornoxicam is used for the treatment of various types of pain especially resulting
from inflammatory diseases of the joints, osteoarthritis, sciatica, and other inflammations.
Lornoxicam is 4 hydroxy -3methyl-2H-thiene 1,2thiazine -2methyl 1-1dioxide
carboxylate
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