The Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs

at affordable prices are available to the vast population of this subcontinent. - Richard Gerster
19-Ganesh Kale ; 29-Sachin naik ; 39- Amol Patel ; 49 Vivek Sargaonkar

Global overview

Global mktsize is approx $770-780 bn with low growth of 3-4% in 2009. US sales is approx 14 times of India & China sales is approx 4 times of India Indias share approx 2% in world pharma mkt.

Revenue Rank 2008 1 2 3 4 5 6 7 8 9 10

Company Pfizer (with Wyeth) Johnson& Johnson GSK Bayer HoffmannLa Roche Sanofi-Aventis Novartis AstraZeneca Abbott Laboratories Merck & Co.

Country U.S. U.S. UK Germany Switzerland France Switzerland UK/Sweden U.S. U.S.

MKT SHARE % 9.20 7.90 5.88 5.78 5.22 5.17 5.15 3.82 3.82 3.09

India
India pharma Mkt size FY09 Rs 93881 ($19 bn) cr on the basis of sales India is the worlds 4th largest producer of pharmaceuticals by volume (accounting for around 8% of global production) In value terms, production accounts for around 1.5% of the world total. Employs around 500,000 Indian company meets 95% of domestic sales Fragmented industry contributes 1.6% to GDP. 5,600 smaller licensed generics manufacturers 270 large R&D based pharmaceutical companies in India and their share is around 70% India produces 22% of world generics Per capita consumption of drugs is very low $93 as compared to $412(Japan), $222(Germany), $191(US) India among top 5 bulk drug producers in world Ranbaxy is 7th worlds largest generic manufacture

Indias Top 10 Pharma Companies

Top 10 companies contributes 30% of market share(on the basis of standalone sales) Company Name MARKET SHARE % Cipla Ltd. Ranbaxy Laboratories Ltd. Dr. Reddy'S Laboratories Ltd. Sun Pharmaceutical Inds. Ltd. Aurobindo Pharma Ltd. Cadila Healthcare Ltd. Glaxosmithkline Pharmaceuticals Ltd. Matrix Laboratories Ltd. Ipca Laboratories Ltd. Orchid Chemicals & Pharmaceuticals Ltd. 5.60 4.76 4.47 4.03 2.98 2.07 1.79 1.60 1.36 1.29

Process of new Drug Development

Clinical Trials
Preclinical File IND at Phase I Testing FDA 3.5 1 Laboratory and animal studies Assess safety and biological 5,000 activity compound s evaluated Phase II 2 Phase III 3 File NDA at FDA FDA 2.5 Review process / Approval 1 approved Phase IV 12 Total Additional Post marketing testing required by FDA Years Test Population Purpose Success Rate

20 to 80 100 to 300 1000 to healthy patient 3000 volunteers volunteers patient Determine Evaluate Verify safety and effectivene volunteers effectivene dosage trials look for ss, monitor ss, 5 enter side effects adverse reactions from longterm use

Various stages of drug lifecycle

Process Flow Diagram for Chemical Synthesis

Typical design of Kettle type Batch Reactor

Cross section of Typical Top suspended Centrifugal Filter

Cross section of Typical Tumble Dryer

Simplified process Flow diagram for Natural / Biological Extraction

Pharma Supply Chain Considerations

What business requirements differentiate pharmaceutical SCM from other manufacturers?
End-user (patient) safety Anti-counterfeiting requirements Product integrity Quality assurance Fraud prevention and detection Regulation !! Electronic signature requirements Records access and retention requirements Product tracking
Class 2 pharmaceuticals must carry unique

identifiers at the item level

End-consumers are not the principal product

customers

CRM doesnt focus on the patient (yet)

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Source - End-User Safety Considerations

Define Define the the Materia Materia ll Qualify Qualify the the Materia Materia ll Approve Approve dd Vendor Vendor List List Qualify Qualify the the Vendor Vendor Monitor Monitor the the Vendor Vendor
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Sour Make Delive ce r

Buy

Foremost of all the considerations in the pharma

supply chain

Are the materials provided by our suppliers safe? Are the products manufactured by our company

Audit the Supply Chain

safe? Are all the products being manufactured reaching the distributors? Are any of our products being adulterated or counterfeited?
The supply chain begins with the material supplied for

product manufacture

Key ingredients need to be covered by Supply

Agreements

Price, Source, Quantity, Quality, Delivery

Major Problems?

Delist the Vendor

Quality Agreements Defined Specification Control, Change Control, Complain Resolution Pre-purchase Usability Tests Toxicity Requirements Know where starter materials are manufactured Know who tests it and how

Strengths
1. India is regarded as having the edge over China in terms of: Qualified, English-speaking employees Fair protection of intellectual property rights supported by well-developed judicial system. 1. 3. Availability of skilled scientists/technicians/management personnel at affordable cost. 4. 5. Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the world. In some cases, this cost is as low as 90%. 6. 7. Well developed chemistry R & D and manufacturing infrastructure with proven track record in advanced chemistry capabilities, design of high tech manufacturing facilities and regulatory compliance.
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Weakness
The NPPA (National Pharma Pricing Authority), sets prices of different drugs, which leads to lower profitability for the companies. Indian pharma market is one of the least penetrated in the world: India accounts for almost 16% of the world population while the total size of industry is just 1-2% of the global pharma industry Large no. of small players increases competition and reduces efficiency

Opportunity
The new patent product regime will bring with it new

innovative drugs. This will increase the profitability of MNC pharma companies and will force domestic pharma companies to focus more on R&D
Large number of drugs going off-patent in Europe and

in the US between 2005 to 2009 offers a big opportunity for the Indian companies to capture this market
Can become a global outsourcing hub for

pharmaceutical products
New markets are opening Aging of the world population, Growing incomes,

Threat
Containment of rising health-care cost.

High Cost of discovering new products and fewer discoveries.

Stricter registration procedures.

High entry cost in newer markets.

Threats from other low cost countries like China and Israel exist

India

THANKS..