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History

12th December 2011 Nilisha Shah & Vivesh Vishwanathan

A Global Viewpoint

Source: IMS Health, IMAP


A Global Viewpoint


Major Global Players


Indian Pharmaceutical Industry


Major Indian Players


Value Parameters
• Price
• Availability
• Efficacy/Effectiveness
• Brand
• Expiry
• Side Effects
• Safety
• Dosage
• Generic Substitute
• Doctors Recommendation
• Drug Intake route eg: Intra Venous, Tablet, Syrup and Capsule


Major Stakeholders
• Manufacturing.
• Patents.
• Export import policy maker/ Regulatory authorities.
• National Pharmaceutical Pricing Authority (NPPA).
• Chemist associations.
• Clearing and forwarding agents.
• Distributors.
• Stockists.
• Chemists.
• Doctors.
• Consumers.


Market Space

Consumer Market or Prescription market

Institutional Market

Industrial Market


End Consumers

Based on Based on
Patient Category Therapeutic areas


Based On
Therapeutic Areas

Oncology Gastrointestinal Respiratory Infections

Metabolic Cardiovascular
Pain Inflammation
Disorders

Central
Dermatology Autoimmune Ophthalmology Nervous
System


Based on
Patient Type

New borns Kids Pregnant Women

Married/
Young Adults Elderly patients
Unmarried

Physically
Travellers
Challenged


Key Aspects
• The growth of population over 1 billion
• Huge patient base.
• Increasing incomes.
• Improving healthcare infrastructure.
• Increase in Lifestyle related diseases such as cardio vascular, diabetes,
Central Nervous System.
• Penetration of Health Insurance.
• Adoption of Patented products.
• Patent Expiries of Block Blusters.


Sectoral analysis: Pharmaceuticals

For above 12
years

Over 25 years Gastrointestinal

Colorful Tablets and Gels OTC


Distribution Channel
Manufacturer

Central
Warehouse

Super Stockist

Stockist Substockist Hospitals

Retailer

Source: BioPharma


Distribution Channel

• Retailer have margins of 16 to 20 %

• Stockists have margins of 8 to 10 %

• Distributors

• CFA get annual payout or halfyearly or quarterly payout.

• Warehouse is owned and operated usually by pharma company


• Manufacturing unit
Primary – API : Self Owned or Third party
Secondary - Every thing after API procurement

• Quality checks.

• API approval FDA.

• Granulation Drying Tabulation Coating.

• Packaging approvals are stringent , tampering not allowed for years.

• Documentation on each step.

• Approvals on all steps.


• Raw material Suppliers.

• API suppliers.

• Other Raw Material Supplier.

• Third Party manufacturer.

• Raw material Inspection.

• Quality of Raw materials.

• Good Will amongst Buyers.


Objective

The overall objective of a Drug Regulatory Authority (DRA)
is to ensure that medicinal products are of
• acceptable quality, safety and efficacy,
• are manufactured and distributed in ways which ensure
their quality until they reach the patient/consumer,
• and their commercial promotion is accurate.


Regulatory
Bodies

MoHFW MoC&F

Department of Department of
Health Chemicals and NPPA
Petrochemicals

DGCI

CDSCO


Drug Controller General of India
• The DCGI is an apex body in the pharmaceutical industry
and governs issues such as
• product approval and standards, Regulatory
Bodies

• Clinical trials, MoHFW

• introduction of new drugs,
Department
of Health
• import licences for new drugs

• and enforcing new drug legislation. DGCI

CDSCO


Central Drugs Standard Control
Organization
• As an agency of the Department of Regulatory
Bodies
Health, the CDSCO works both at the
Central and the State level
MoHFW

• Responsible for ensuring safety, efficacy
Department
and quality of drugs supplied to the public. of Health

•The agency performs the below functions DGCI
with the Drugs Controller General of India
(DCGI) as the executive head.
CDSCO


Functions of CDSCO
Approval of new drugs and clinical trials

Import Registration and Licensing

Amendment to D &C Act and Rules

Banning of drugs and cosmetics

Grant of Test License, Personal License,
NOCs for Export

Testing of Drugs


IND Applicant CDSCO HQ

Examination by Approval
Drug Division

Detailed Review
by IND
Committee

Timeline –
Phase I – 90 days Recommendation
Phase II – 45 days to DCGI
Phase III – 60 days


Key Acts

•Schedule M Drugs and The Drug Price • Price Control for
•Schedule T Cosmetics Act, Control Order, Essential Medicines
•Schedule Y 1940 1995

• Regulation of Profession of
Pharmacy The Pharmacy Patents Act, • Identifies Product
• Maintaining Central register of Act, 1948 2005 Patent
pharmacy

The Drugs and To prohibit the advertisement for
Magic Remedies certain purposes of remedies
Act, 1954 alleged to possess magic qualities


Indian FDA: Licensing Authority
• To grant and renew licences for the following Categories of Drug Manufacturing Units .
• To approve plan of manufacturing premises for Drugs.
• To Grant Licences for Repacking of Drugs
• To Grant and Renew Licences for Drug Selling Units. .
• To issue various Certificates for Tenders, Exports as listed below:
– WHO GMP certificate
– No Conviction certificate
– Performance Certificate
– Schedule M GMP Certificate
• To issue Transport Permits under NDPS Act.
• To investigate complaints received regarding drugs
• To carry out inspections of manufacturing and selling Units
• To draw samples of Drugs
• To conduct raids for those manufacturing spurious drugs /substandard drugs
• To take legal action against the offenders and prosecute
• To give approval to personnel as Competent Technical Person for Manufacturing, Testing.
• To educate the consumers for the safe use of Drugs .


Ministry of Chemicals and Fertilizers

The Ministry of Chemicals & Fertilisers constitutes
bodies such as Regulatory
Bodies
• The Department of Chemicals & Petrochemicals and
the National Pharmaceutical Pricing Authority (NPPA).
MoC&F
• These departments are entrusted with the
responsibility of policy making, planning, development
Department of
and regulations relating to Chemicals, Petrochemicals Chemicals and NPPA
Petrochemicals
and Pharmaceuticals.


Department of Chemicals and Petrochemicals
The main objectives of the policy are:
· To ensure availability of good quality essential
pharmaceuticals at reasonable prices for mass
consumption.
Regulatory
Bodies
· To strengthen the indigenous capability for cost effective
quality production and export of pharmaceuticals by
reducing trade barriers in the pharmaceutical sector.
MoC&F

· Quality control system for pharmaceutical production
and distribution to make quality an essential attribute of
the domestic industry. Department of
Chemicals and NPPA
Petrochemicals
· Encouraging pharmaceutical R&D that is compatible
with the country's needs.

· To encourage new investment in the pharmaceutical
industry and the introduction of new technologies and
new drugs.

National Pharmaceutical Pricing Authority

• It has been entrusted with the task of fixation / Regulatory
revision of prices of bulk drugs and formulations, Bodies

• enforcement of provisions of the Drugs (Prices
Control) Order MoC&F

• and monitoring the prices of controlled and
decontrolled drugs in the country.
Department of
Chemicals and NPPA
Petrochemicals


Draft NPPA Policy, 2011

The key principles for regulation of prices in the National
Pharmaceuticals Pricing Policy 2011 are:

(1) Essentiality of Drugs
(2) Market Based Pricing
(3) Control of Formulations prices only


Range of Reduction in Ceiling Price % of medicines
related with
NLEM 2011

Decrease in price of Highest Priced Brand 52%
between 0-5%

between 5-10%

between 10-15%

between 15-20%

between 20%


Diabetes is the syndrome of having excess blood sugar due
to low levels of insulin or insulin resistance

Depending on the insulin production in the body, diabetes is classified into three main
types

Diabetes

Type I Type II Gestational

(GDM) develops
during pregnancy and
• People suffering
usually goes away
from Type II diabetes
after pregnancy
• Generally seen in are unable to use the
children and young insulin produced in
• Chances of GDM
adults. the body effectively
sufferers developing
type II diabetes in
• Also called as • Type II diabetes can
the future is very high
juvenile diabetes. be managed with
lifestyle changes and
• Worldwide, it affects
oral drugs
around 3-10% of
pregnancies

Different Anti-Diabetic Drugs

Block the liver from making
Biguanides sugar

Raise the amount of insulin in
Sulfonylureas
the body

Raise the amount of insulin in
Meglitinides
the body

Help the body use insulin
Thiazolidinediones better

Alpha-Glucose Slow the digestion of sugar
inhibitors

Controls the amount of blood
Insulin
sugar

Increasing prevalence of diabetes: Global Market Overview

• Stands at INR 1.22 tn in 2010 and is
expected to grow to INR 1.71 tn in 2015

• Currently, US occupies 37% of the
global market for the revenues from anti-
diabetes products

Significant growth is expected in the
Asia-pacific region, specially in India and
China

• Currently there are 220 mn people
living with diabetes, with approximately
90% suffering from
Type II diabetes

• Insulin and glitazones are the largest
product classes, and comprise 73% of
the total market

• Rosiglitazones and pioglitazones are the
other popular drugs

Source: Advanced Medical Technologies “Global diabetes market growth by segment, regions “, Jan 2011; Prosidion “Type 2 diabetes and
obesity”, Jun 2011 ; Article Buster “ Epidemiology: Diabetes In India-a country faced with a mammoth diabetes epidemic”, May 2011

Indian Market Overview

• Anti-diabetics represent the second
fastest growing
therapeutic segment among all the
segments ,after oncology

• Market is expected to grow from INR
22.54 bn to INR 38.10 bn in 2015, at a
CAGR of 11%

• Biguanides, Gliclazide, Gliclazide with
metformine, Rosiglitazone and
Pioglitazone are the top selling drugs in
Indian market

• Abbott’s Human Mixard 30/70 is the
largest selling insulin in Indian market

• It showed largest growth among the
top 10 brands in Indian
Pharmaceutical market

Source: Edelweiss “Indian Pharma Sector: delving deeper”, Apr 2011

Diabetes Market

Pharmaceuticals Medical Devices

Monitoring
Oral Drugs Insulin Devices, devices
for administering
Insulin

• Anti-diabetic pharmaceuticals occupy around 80-85%of the Diabetic market share.

• Oral drugs constituting around 70-75% of the market share.

Source: Advanced Medical Technologies “The Diabetes Market”, Jul 2010

Increase in Shifting
Strategic Geographical Acquisition
MR
Tie Ups expansion
Disease by MNCs
Strengths Profile

Sun Merck JV
April, 2011

Lupin – Lilly
July, 2011

Cadila Bayer JV
January, 2011

Biocon Pfizer
October, 2011

•Increase in the number of
diabetic patients •Price regulation in insulin
market
•Introduction of newer and
better drugs •Competition from
complementary and
•Increasing aging population alternative medicines

•Comprehensive health •Maintenance of healthy
insurance policies covering lifestyle to avoid diabetes
diabetes

Factors considered by doctor before initiating treatment
12

10

8

6

Rating
4

2

0

Age Age Age Age Pregnant
(1-16 yr) (17- 35 yr) (36- 55 yr) (56- 65 yr) Women

Doctor

Brand

MOA

Effectiveness

Dosage

Price

Side Effects

Taste

Storage

Availability

Other medication
substitute

5 4 3 2 1
Colour Code V. High High Medium Low V. Low

• Find the right doctor

• Additional information about diabetes management not shared by doctors.

• Patients convenience

• Adherence / Patient Compliance due to uncontrolled sugar levels and Mode of
Administration

• High costs associated with the treatment and diabetes management

• Maintenance of healthy life style to control diabetes

• Increasing safety and reducing side effects such as diabetic retinopathy, etc

• Internet-supported diabetes data management services
• Internet-based support services may become a cost- and outcomes-effective way to
promote lifestyle change for people with diabetes
• Healthcare coverage plans usually do not reimburse multiple visits to a dietician or
other providers of lifestyle change support; thus, many individuals cannot afford the out-
of-pocket expense for such care
• Personalized wellness plans for people with diabetes focusing on diet, exercise, foot
care, stress management, and nutritional supplements.
• Healthcare conversation with people who have diabetes in an affordable fashion
• Interaction with physicians (including endocrinologists, cardiologists, nephrologists,
neurologists, general practitioners, and ophthalmologists) who believe in and practice
an integrative healthcare approach
• Information on new developments in innovative drug and insulin delivery systems

• Portal with complete doctor information including the qualifications, expertise,
experience, success cases.

• Ratings for doctors

• Help from doctors in case of emergency and incase of absence of the doctor
in the clinic - just an email away.

• Restaurants, hotels with special menu section for diabetics
serving sugar free recipes.

• Similar opportunities for caterers.

24 %

76%

Sugar Free Food

• Prescription is not legible.
• Printed Prescription from doctor.
• Prescription emailed or sent as text messages.

21%
10%
90%
79%

Prescription Home Delivery

• Initiate Discounted sale.
• Almost 30% Margin between wholesaler and retailer.
• Lower rates might help in decreasing stock expiration.

10%

90%

Discounts

• Entire strip to be purchased when there is need for only few.
• Launching single units of Crocin ,Gelusil, Combiflan,etc.
• Expiry Date and Pricing issues can be sorted easily.

16%
12%

88%
84%

Tablets Tonics

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Sectoral analysis: Pharmaceuticals

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