Generic Pharmaceuticals Industry on a Roll

Generic Drug is a copy that is the same as a brand name drug in dosage, safety, strength, how it is taken, quality, performance and intended use

drug is not sold as the brand name, but it has the identical strength, dosage and route with brand-name drug

Use of generic drugs is now widely accepted and they are commonly prescribed by physicians and dispensed at hospitals

The generic drugs are less expensive as compared to branded drugs as generic manufacturers do not have the investment costs of the developer of a new drug

When patents are nearing expiration, manufacturers usually approach the Government/Drug Control Department to sell generic versions.

In the process, the consumers get genetic drugs at substantially lower costs.

Both branded and generic drugs are manufactured by conforming to International standards

Brand name drugs are usually given patent protection for 20 years from the date of submission of the patent

After this period of time any company file to make its generic version

Generic substitution may not be appropriate in certain circumstances where only a branded drug would be suitable for the patient

For some patient having generic drug may be a cause of problem

Generic drugs offer an important tool for reducing the rate of growth in overall health expenditure.

Generic drugs play an important role in health care and the availability of generic drugs reduces the monopoly and oligopoly powers of the patent holder.

The Government may also impose compulsory licensing so as to make available the much needed generic drugs.

India already has well over 5 million people living with AIDS

India must provide medicines to hundreds of thousands of people each year

For lower cost of medical facility

Reducing monopoly in the market

For sustainable growth of other smaller pharmaindustries

India has had a vibrant generic industry since 1970 when it lawfully amended its existing patent act to disallow patent protection for pharmaceutical products.

This action catapulted India from a medicine importer to medicine self reliant nation

From 10% of total markets world wide in 1995, generic producers at this time supply around 65% of global sales of, off patent products(Anon 1999)., while 35% comes from patented molecules

India has been and remains the producer of choice for medications in most developing countries, producing medicines of assured quality that meet all international standards, at the lowest costs and highest volumes.

Experience in reverse-engineering drugsCost advantages in research, development and manufacturingLaunch generic products in less regulated markets, then

regulated marketsGain experience, Work out any is, Lower Costs, Experience in

cGMPs Investing capital; yearly estimates up 60% from 8 years ago Investing in infrastructure to better control processes Meet higher standards in regulatory requirements Drug Discovery Agree

Aurobindo, Cipla, Glenmark, Jubilant, Lupin, Matrix, Orchid, Sun Wockhardt, Zydus Cadila

Geographic Growth

through acquision

increased doses product filing from less regulated market

limits depends on any regulated market

Growth Through Partnering

Need to compete on price in many cases

Aurobindo 8-10 quarterly

Cipla additional 35 prior to FY06

Glenmark 14 within 2007additional 6-11 with partners

Jubilant 15 in dev

Ranbaxy 25 over next year

Sun Pharmaceuticals 18 -20 per year

Wockhardt 15 pending

Zydus Cadila 16 in

Zydus Cadila Distribution agreement with Mallinckrodt; limited period,

renewable 50/50 JV with Mayne- cytotoxic dose and APIs

Glenmark Development and Supply Agreement with KV for 8 ANDAs

Invagen - 7 products

Konec for nitroglycerin and Interpharm for naproxen

Lupin Injectable ceph generics with Baxter

Oral ceph generics with Watson

Dr. Reddy

Rheoscience- Phase III PPAR

Argenta-COPD

Formed drug dev company in India- Perlecan

Glenmark

Oglemilast licensed to Forest and Teijin (Japan)

Ranbaxy

GSK Drug Discovery & Clinical Development

Big Pharma, companies in response to their loss of market hegemony, have lobbied to strengthen intellectual property protections for pharmaceutical products and processes

Finally the U.S. Trade Representative-Big Pharma team succeeded in imposing a patent-monopoly system on India and other countries through the World Trade Organization (TRIPS) Agreement of 1994.

TRIPS required WTO member states to grant patents on all classes of products (including medicines), to provide protections for a minimum of 20 years

Act creates rights to patent certain new uses, formulations, delivery systems, combinations of existing products, and minor variations of existing chemical entities.

The act leaves in place India's procedurally laborious and inefficient compulsory licensing scheme

The act grants for patent applications between the publication and approval of the patent deterring generic entry even in cases where the patent application may later be denied

New Drug Application (NDA) is a document where in drug sponsors formally propose that the FDA approve a new pharmaceutical drug for sale and marketing in the United States

The NDA allows the FDA reviewer to determine: Whether the drug is safe and effective in its proposed use(s).

Whether the benefits of the drug outweigh the risks.

Whether the drug’s proposed labeling (package insert) is appropriate, and what it should contain.

Whether the methods used in manufacturing the drug and the controls used to maintain the drug's quality are adequate to preserve the drug's identity, strength, quality, and purity.

During 1970-1990’s, due to patent expiry, generic pesticides became the fastest growing sector elsewhere as in India.

From 10% of total markets world wide in 1995, generic producers at this time supply around 65% of global sales of, off patent products(Anon 1999)., while 35% comes from patented molecules.

In India too, major share of technical production/markets comes from off patent/generic products. The Patent Act will now usher in new molecules – from R&D based Companies. Generics face substitution and regulatory uncertainty elsewhere as in India.

Market for generics in India shows sure erosion in price and value offered due to:

Large capacity, both for actives/ formulations, at regional/national levels – consolidation ?

BT Cotton, changing pest/disease infestations, transgenic crops impact on pesticide demand ?

Imports from China etc. both legal and illegal result in wide price difference for same molecules between branded and generic producers.

Local producers resorting to price discount strategy, lowering the net value for all times..

Availability of spurious/substandard products,readyto sell network, and corrupt business environment.

kill brand value chain.

We ourselves, the fragmented industry, for failing to look at the global picture, tolerating illegality, partnering corrupt practices, and by an absence of product portfolio management.

The Government, which is unable to provide a healthy regulatory environment/understanding.

The network and the supply chain, who has the last laugh at the merry bunch of jokers involved in this game of perpetual value reduction.

The marketers who wish to easy sell and not work on product stewardship - <quality <price….

The end users who buy cheap products without thinking of consequences on the crop.

R&D companies are divesting actives,which can be acquired by other generic producers.

Actives registered before 1993 may not be supported due to data generation costs by the majors unless generic producers support use extension for new crops. Generic producers must produce and share data/costs and find new markets

Allocate resources for product stewardship such as resistance management, new usages, dose setting.

Generic supply and demand issues, production capacity rationalization, investment in data and development.& exports, real challenges ahead!

Govt. regulation will limit use of old generics.

New solutions to crop/ Animal problems to meet changing customer needs – need of hour.

Performance enhancement of existing active products by improving formulations, application methods, and combinations.(registration).

Offering generics as a part of crop solutions package rather than as stand alone products.re-launch generics – don’t write them off..

.

Allowing easier route for Combinations Registration, new formulations and export of generics. – is the regulator listening?

Produce newly off patent products with additional services and performance/quality guarantees

Manufacturers, distributors and dealers must stop looking at generics as only(low) profit giving commodities, but look at each product as a crop specific solution provider. Large producers must assume leadership role. Substitution must not be automatic – it must be managed by design..

Many off patent products outside India are potential candidates to be examined for manufacture –export, or domestic development, by Indian manufacturers of actives. This needs positive fast track registration regulation based on reasonable data requirement.

Parallel importers from China – eroding or adding value? Introspection/regulation needs/partnership?

R&D Companies in India, and large Indian producers must look at potential partnerships, nationally and regionally, to promote generics by creating a value chain/brands/solutions – to coexist(peacefully) with new (patented) products, and biotechnology or genomic systems.

Safer and newer formulations such as SC/WDG/ME etc. must be encouraged to breathe some life into generic value chain.

Contract farming, agricultural retail, must get involved into the generic value chain to deliver quality to end users with monitoring capability.

Minor use registrations must be on fast track, to encourage precision farming.

Regulation should be concerned with safety of environment, quality, bio efficacy and MRL not with market protection or data shields.

Regulation should encourage sharing data, partnerships and rules for data compensation,notproduct monopoly..

Playing with data exclusivity leads to market exclusivity. Drives majors into investing time and resources for minor changes rather than develop innovative products.

Patent protection is now 17 to 20 years. (ankitcheck it out I think it is for 4,8 12 years as well)

Generic industry has a positive role to play. Regulators must recognize this. So must industry.

Indian Agrochemical industry in present form unsustainable to support innovative strategies in the future for generics.

Food safety, environment, health, key regulatory concerns – are these industry concerns too?

Corporate need to better handle its image.

Our network – partners in crime or value?

Provide services not only products!

Regulation must facilitate sustainable agriculture with industry, rather than make law to fill jails..

Generics in India …..God & Rain be with you! They are your only support left……..unless..

Position 2006 (2005)

company No of R&D products in 2005 (2004

No of own products

1 (1) Sanofi-Aventis 205 (226) 139

2 (2) GlaxoSmithKline 181 (170) 123

3 (4) Merck & Co 159 (128) 119

4 (3) Hoffmann-La Roche 145 (144) 72

5 (7) Novartis 123 (109) 66

6 (5) Johnson & Johnson 116 (117) 65

7 (6) Pfizer 109 (115) 68

8 (8) AstraZeneca 108 (105) 81

9 (12) Astellas 89 (68) 52

10 (10) Bristol-Myers

Squibb

81 (84) 50

Overall 28.2% of pipeline projects are targeted against cancer, indicating that oncological agents account for almost a third of drugs in R&D. This figure has consistently increased year-on-year, as the industry focuses on this massive killer which will affect one in three of us in our lifetimes.

It is also an area which has made huge strides therapeutically, and one for which targeted treatments can command high prices.

Elsewhere, diabetes is another area which continues to see growth, as the prevalence of the disease rises due to poor western diets. The 10% growth in the size of the antidiabetic pipeline is certainly significant. Vaccine R&D has increased by an even greater percentage, as emerging infections continue to challenge the global community.

Also posting an increase, although slipping down the chart, is the analgesic category, which continues to build on rises reported last year. Also of interest are the fact that gene therapy has arrested its decline, and Parkinson’s disease and multiple sclerosis appear to be other growth areas.

Opportunity and threats for generics

Increasing demand for low-cost therapies

Aging population

Consumers becoming more cost sensitive

Increased generic substitution

Government involvement

▪ US Medicare Drug reimbursement

▪ Reference pricing in Europe

Less

Dev

World

More

Dev

1950 1975 2000 2025 2050

0

10

20

30

40

Perc

ent

of Popula

tion o

ver

60

Products with $100B in branded drug sales are coming off patent in the next 7 years

Patent challenges by generic companies

Top 5Sales

2006 2007 2008 2009 2010 2011 2012

20.1

12.4

15.2

10.5

18.4

10.0

12.3

0

5

10

15

20

25

Sale

s B

illions U

SD

0

10

20

30

40

Num

ber

of dru

gs c

om

ing o

ff

pate

nt

(New

port

Constr

ain

t D

ate

)

Rapid price erosion in the U.S. and UK

Diminishing margins on both dose and API sales

New regulations in Germany (AVWG)

Settlements between generics and brand companies are delaying generic entry in the U.S (leapfrog strategy ).

ANDA approval backlog in the U.S.

Fewer new launches by innovators over the past years will translate into fewer opportunities for generics down the road

Tie up between patient drug maker and generic drug maker before the patient get over (Foresight)

Demand

Purchasers focus on price

Past relationships matter less

Reverse auctions

Supply

Generic filings and approvals at all-time high

A number of new entrants, many from India, often with access to low- cost APIs

Overcapacity in manufacturing

Focus on market share rather than bottom line

Authorized generics in the U.S.

Consolidation

Geographic diversification

Backward integration into API

Sourcing from India, China, and other low-cost countries

Alliances with companies in low-cost countries

Moving manufacturing to low-cost countries

Focus on niche products

Will focus on price backfire?

Is the number of suppliers going to decrease enough to give the remaining players more negotiating power?

What will be the impact of generic entries from China?

Thank you