The Covid-19 pandemic has disrupted the world economy with countries closing their borders, commerce and trade coming to a standstill, and people having to modify the way that they live. It has also forced nations to take a hard look at the current medical solutions available today and how they can be made more effective in the new normal. One option may be to repurpose existing drugs for new uses, so that they can be applied to a wider range of medical concerns. A recent research study suggests that drugs initially developed for treating diabetes and alcoholism may also prove to be beneficial in treating cancer. Another option is to build a resilient pharmaceutical and healthcare ecosystem. This involves finding new medical solutions, a costly and time-consuming process, consisting of drug discovery, research, testing and trial cycles, as well as the development of suitable delivery mechanisms.
To avoid disruptions in providing patients with necessary medical supplies and drug products, global pharmaceutical and biotechnology sectors are working towards resetting their existing strategies.
Indian pharma sector
This unprecedented health crisis has presented quite a few unique opportunities to pharmaceutical industry, especially in a developing nation like India.
Globally, India stands third in drug production by volume and is the manufacturer of 60 per cent of the global vaccines. The country also contributes nearly 90 per cent of the global demand for the measles vaccination. In fact, more than 50 per cent of the generic drug requirements in the US are met by Indian drug-makers. Made-in-India drugs are known for their safety and quality in the international markets, with the US, Japan, and the EU being some of the largest buyers. Exporting to more than 200 countries, the pharmaceutical sector in India comprises 3,000 drug companies and approximately 10,500 manufacturing units.
While India is a world leader in generic drugs, the country is highly dependent on the import of raw materials, key starting materials (KSMs), and active pharmaceutical ingredients (APIs) for producing even common medicines such as the analgesic pain-reliever Crocin. Low-profit margins and a non-lucrative industry are few of the major reasons for importing APIs instead of manufacturing them domestically. Currently, 70 per cent of APIs in the pharma sector are being imported from China.
Another vital industry in India – medical devices – accounted for more than 13 per cent of the Asia Pacific medical devices market in 2019 and is estimated to grow at a CAGR of 7.5 per cent through 2025. However, this sector is highly dependent on imports, for almost 70-90 per cent of different categories of critical medical devices, with diagnostic equipment featuring as the largest component in the list of imports. This is primarily due to the fact that the country’s domestic manufacturing of medical devices is negligible, and limited to low-value products, such as medical disposables and consumables that do not require huge upfront investments, unlike the medical electronic devices.
Change in priorities
With global lockdowns implemented to curb the spread of coronavirus, the global supply chain of medical raw materials was significantly impacted, affecting the production of drugs for the treatment of diseases such as HIV, cancer and malaria, as well as over-the counter (OTC) medicines and health supplements.This brought to the fore the realisation that India’s pharma industry must be transformed into a self-sufficient ecosystem in order to ensure uninterrupted delivery of medical solutions, both domestically as well as globally.
In addition, the global health crisis has accelerated the adoption of ‘medical diplomacy’ with India fast-tracking the export of Hydroxychloroquine, the anti-malarial medicine that has been shown to have some success in treating the Covid-19 virus, to all those countries that have requested it. The government also undertook measures like sending military doctors to neighbouring countries such as Bhutan and Nepal to provide aid to the local administrations.
Building a self-reliant pharma segment
Disrupted supply chains resulted in the prices of raw materials going up, shutdowns caused delays in production, while shipping costs increased due to restricted trade activities. Due to these issues, drug makers have not been able to launch new products or perform clinical trials, leading to lower revenues.
Therefore, the need to become a self-sufficient sector to tackle the ongoing challenges and provide comprehensive medical solutions is critical.In order to fully capitalize on our existing resources, it is essential to develop a multi-pronged strategy to address manufacturing in India, for both the short term as well as long term.
In the short term, strong measures must be taken to improve the capacities of the domestic manufacturers. It is also necessary to look at alternate vendors globally to meet the demand-supply gap of raw materials.
In the long run, it is critical to promote end-to-end manufacturing within India, with the use of advanced technologies and processes. In this regard, the government’s ‘Make in India’ programme aims to incentivise the production of raw materials, by establishing bulk drug parks and providing other stimulus measures to boost local production of active pharmaceutical ingredients and key starting materials. Case in point, the Union government recently announced a Rs. 30 billion project for setting up three bulk drug parks, as well as a 20 per cent financial incentive for the next six years to manufacturers for producing 53 critical bulk drugs, which would be further used to make medicines.
Establishing a robust R&D space, tapping into the country’s talent workforce, adopting new technologies such as artificial intelligence, machine learning, and big data analytics into various processes, and developing domestic production-supportive rules and regulations, amongst other measures, can help the Indian pharma industry to become self-reliant.
The government is also looking into expanding its portfolio of biosimilars, production of which is considered to be highly complex in comparison to generic drugs. A biosimilar is a biologic medical product, that is not an exact replica, but highly similar to another already approved innovator biological medicine. While the biologics are produced using highly complex manufacturing processes that involves living cells, biosimilars can be manufactured when the original biologic’s patent expires.
In fact, India’s biotechnology sector is being considered as one of the key drivers to contribute to the country’s $5 trillion economy target by 2024. In the global market, every third new drug approved is a biotech drug, and with imminent patent expiries of key biologics, biosimilar drugs can play a vital role in boosting the growth in this sector.Therefore, while issues such as limited capital, inadequate infrastructure and complex regulatory framework act as major roadblocks in biopharma manufacturing, the government is actively looking at ways to tackle these concerns. Setting up bio-manufacturing hubs under the ‘Make in India’ initiative is being regarded as an ideal solution for dealing with these challenges.
The medical devices industry is set to receive government funding in the form of investments amounting to almost Rs. 34.2 billion over a period of five years for businesses that are willing to manufacture key medical devices, including cancer care and radiotherapy medical devices, and radiology and imaging medical devices, etc.The central government has also proposed an improved regulatory framework that would be conducive for mass testing and production as well as adoption of new technologies and other innovations in the area of medical devices.
The way forward
With the Indian pharmaceuticals sector undergoing a hard reset under the new normal, to continue its reign as the ‘Pharmacy of the World’, India needs a huge breakthrough in next-generation pharmaceutical products. Incentives such as creating local capabilities for manufacturing of active pharmaceutical ingredients and key starting materials, developing new drugs through innovation and collaboration, and promoting drug makers that already have API production capabilities to become exporters of active pharmaceutical ingredients for global buyers, are contributing towards building an ‘Atmanirbhar Bharat’ in the post pandemic era.
(The author is Managing Director, West Pharmaceutical Services)
