India Pharma Summit Speech Dt 30.11.09

TEXT OF SPEECH By Lalit K. Jain, Vice-Chairman, SME Pharma Industries Confederation (SPIC) at INDIA PHARMA SUMMIT Held at Mumbai, India On Nov 30, 2009 India Pharma – Status and Opportunities for Production, Investment & Trade Respected Secretary of Department of Pharmaceuticals, Ladies and Gentlemen: SME Pharma industries confederations is a apex body of small and medium scale formulators and bulk drug manufacturers of medicines. We have over 2,346 active members besides 3,000 associate members, which when coupled with other small scale SME associations add to a total of over 7,000 members out of total 10,563 licensed manufacturers in India. We account for 87% production by volume and 40% share by value in the market. The founder of our nation Sh. Mahatma Gandhi not only give us freedom of speech, democracy but also give us freedom from economic dependence from foreign goods of the British. In a short Span of 62 years Indian Pharmaceutical Industry has grown many fold and produce medicines of highest quality and affordability not for India alone but for the whole human mankind whether in developed countries all in developing countries. We are in a way self sufficient in our requirements of medicines. Prices of medicines in India are one of the lowest priced and still this is because we have one of the lowest per capitals income in the world. Not only a large number of people cannot afford medicines but often have to pay comparatively significant amounts of their wages or money taken on loan or purchase medicines that they can ill afford. Also the majorities of medicines used are not accessible through public health outlets and so have to be out of pocket expense. In markets where perfect competition works, the most bought is the cheapest brand. Competition brings down prices. Sellers and buyers are equally well-informed about the

product before making a purchase. However, in pharmaceutical trade the purchase decision is not of the consumer. Therefore, the most popular brand of a drug is also often the highest priced. (In terms of cars, this would mean a majority buys Mercedes and not Suzuki 800.) The purchase decision here rests entirely with the doctor which the SME sector funds difficult to tap. Pharma is the only sector in India (and probably in the world) where government tender procurement prices are 1-3% of the retail market prices! This if anything indicates the level of overpricing by MNC & large firms. An example: for the Tamil Nadu Government, a drug company bids to supply Albendazole 400 mg tablets, a medicine for worms, at a mere 1 cent per tablet, while brands of this drug sell for 40 cents in the market. Today the choice of reliability, quality and affordability of medicines are the need of human mankind all over the world. Often it is thought that medicines at lower prices can not be of highest quality and it is often said that how is it possible that India with in a span of 62 years against pharmaceuticals companies in the west which have been in existence for more than 200 years, could give the human mankind quality medicines at a fraction of the prices. The apprehensions are raised in media reports prompted by multinational and large firms as their competitiveness is threatened by reasonable pricing of SME units in India. I will now take up the quality issue: 1)

No manufacturing unit in India is licensed to manufacture drugs and medicines without being GMP complied.

2)

The Indian GMP standards are more stringent than some of the so called standards laid down by the developed countries in infrastructure requirement, validatiory procedures and Good Laboratory Practices etc.

3)

Large scale media reports had tried to project India as a destination of nearly 40% spurious medicines in the world. These reports are base less and without any evidence and proof. The Indian drug regulatory authority picks up around 40,000 to 50,000 samples of medicines every year and only 0.03% of the samples have found to be of doubtful quality SEARO, WHO report also put the figures of doubtful medicines at 0.29%. Due to media onslaught the Indian drug

control authorities picked in 2009 up over 24,000 samples of medicines as per independent scientific plan of the Indian Stastical institute, Hyderabad and only 11 samples were found to be of doubtful quality which is 0.004%. In every country there are dandestine manufacturers of fake products like watches, electronic goods etc., however in India, if there are a few such persons the total percentage of doubtful medicines is till 0.004%. 4)

USA based companies in India are meeting 89% of their requirements from SME sectors. The top US based companies in India like Pfizer, Wyeth, Sehering Plough, Novartis, Sanofi Aventis are getting manufactured their medicines from the SME sectors in India and are likely to increase their share of procurement from SME sector Pharma companies further for export to USA and Europe to counter the medicines exported by Indian large companies to their home countries?

5)

All medicines, whether branded, branded generics or pharmacopoeial generics are manufactured as per strict standards laid down in pharmacopeias of USA, EU, India or Japan. The myth that branded medicines offer one a superior medicine is floated to support unethical high promotional and administrative expenses, when all medicines are manufactured as per pharmacopeias, it is wrong to say branded generics or pharmacopoeial generics are inferior in any way. I would openly throw a challenge to prove that pharmacopoeial standard medicines have proved to be fatal to the patient or inferior to branded medicine.

6)

Indian SME Pharma sector has dedicated centre known as SMPIC centre at NIPER, Mohali and have access to sophisticated analytical instruments like 400 MHz FT – NMR (Bruker), MALDI TOF-TOF (Ultra Flex, Bruker), Linear Ion trap LC-MS/MS (Thermo LTQ-XL), Ion trap LC – MS/MS (Finnigan Mat) GC-MS with Auto Sampler (Shimadzu), GC MS/MS with Auto Sampler (Thermo), GC with Head Space (Shimadzu), Powder XRD (Bruker), Capillary Electrophoresis (Beckman), FT-IR with ATR (Nicolet), FT-IR with microscope, ATR, Hot plate, SMS system (Perkin Elmer), UV-VIS Spectrophotometer etc. The 333 PhD Thesis, 17,848 bound scientific journals SciFinder (STN) facilities and services of 109 PhD students and 275 MS students are also available to SME sector in India in their quest to improve in house specifications over and above the pharmacopoeial specifications along with research for new molecules.

Now I would like to enlighten this August gathering has to how the quality medicines are affordable:

1)

India has over 300 recognized colleges and 250 unrecognized colleges which churns out nearly 30,000 to 40,000 B. Pharma students every year besides 3,000 M. Pharm / MS students, chemical engineers, biologist, Biotechnologist and thousands of MBA students for the pharmaceuticals industry in India. These professionals are available at 10% of the cost of a similar professional in USA. The part of these professionals every year even migrate to the pharmaceutical industry of USA and the majority of the same talented professionals prefer to stay in the country.

2)

Around 354 based API medicines in India have been identified to be essential medicines, which meet over 90% of the medicine requirement of a patient. India capability to produce this medicines is exhorting and we have still spare capacity to meet further requirements at reasonable prices, much cheaper then it would cost in USA, EU and the developing countries.

3)

The SME Pharma sector in India has a talented pool of pharmacist, entrepreneurs who practice spot management rather than remote control management as in the multinationals and large Pharma firms and therefore keep their costs down benefit of which is transferred to the patient.

4)

We have a well established excipients industry, Empty Gelatin capsule units, packaging industry which even caters to units abroad.

We in the SME Pharma sector in India feel that providing quality medicines at affordable prices is our social commitment to our people rather than using the suffering of human mankind to fill the offers on way of high promotional and administrative expenses in by resorting to the Maximum Retail Prices of medicines by illusionary and unethical practices. We offer to the world quality and affordable medicines with made in India label at fractional cost at which it is available in their country. Non tariff barriers like free trade agreements, regulatory measures and campaigns like counterfeit and falsified medicines are being advocated to crush the competitiveness of Indian Pharma industry. Opportunities 1)

Opportunities exist for investment in these small and medium scale enterprises. Due to their scale of operation smaller investments can result in faster success rates.

2)

Opportunities exist for companies abroad to procure and source their requirements from the SME sector which shall not only result in bringing down their cost but also ample availability and lower patient to expenditure in their country while ensuring quality.

3)

Joint venture

4)

Upcoming markets can source their technology requirements from the SME sector in India.

Challenges At the same time the sector poses to be a challenge because the industry requires tremendous capacity building in terms of awareness building, guidance, project preparation, implementation, technological intervention and monitoring. I request the August audience from the government to accord SME Sector in pharmaceutical industry a thrust status.