Healthcare sector & 2010 Budget

The Union budget for fiscal 2011 has done little to attract investment in healthcare or improve the access and affordability of modern health services, key private healthcare providers and consultancies say.

India’s health industry, now increasingly dependent on the private sector, is unable to provide modern health facilities to more than 60% of the country’s population, according to industry estimates.Its current capacity is 860 beds for every 1 million people. This will need to grow almost five times before the country can match the World Health Organization’s norm of 3,960 beds for one million people.
Recent studies by consultants Ernst and Young and KPMG say India needs to add 100,000 beds every year for the next two decades—at an annual cost of Rs50,000 crore—to meet its healthcare needs.

The healthcare industry had recommended immediate policy reformation and a move towards a combined public and private healthcare spending equal to 7% of gross domestic product (GDP) over the next three years, up from the current 4.5%.
Although the Budget raised the plan allocation for the ministry of health and family welfare by 14% to Rs22,300 crore from the current year’s Rs19,534 crore, the industry says this is simply not sufficient.

“In a Budget that provides 46% of plan allocation for infrastructure, not finding healthcare on the agenda of the finance minister takes another year away in brindging (the) affordability and accessibility gap in the sector,” said Vishal Bali, chief executive of Fortis Hospitals Ltd.

“In terms of increase in allocation towards healthcare, it (the Budget) has not lived up to expectations. This was much required considering India has one of lowest government spendings on healthcare when compared to other economies,” he said.
Hitesh Sharma, partner and national leader, life sciences practice, Ernst and Young, said increased allocation for the ministry was a boost to primary healthcare and infrastructure. But the much-anticipated extension and rationalization of a tax holiday for hospitals had not come through.

The Budget announced an annual health survey that will create health profiles of all districts, and the abolition of import duty on specified inputs for manufacture of orthopaedic implants.District profiling will place health authorities in a better position to prioritize funding based on variations in disease patterns across regions. It will also help healthcare deliverers, medical technology and pharma companies prioritize their products and services keeping regional variations in mind.

Bali said the rural health survey, under the National Rural Health Mission scheme, and wider health insurance coverage through Rashtriya Swasthya Bima Yojana (National Health Insurance Scheme) were innovative steps to increase healthcare cover for Indian villages.But it was ironical, he said, that even though the Budget provided investment-linked deductions to the tourism sector, it did not offer any impetus for investments to set up new hospitals.

“Healthcare in India has major challenges in combating three diseases—heart disease, diabetes and cancer—that plague the population,” said Pratap C. Reddy, chairman, Apollo Hospitals.“It would have been helpful if the government had shown encouragement by enabling an investment-friendly environment for this sector, as our other significant challenges include severe shortage of health infrastructure and health human resources,” he said.

Reddy also slammed the expansion of the service tax net to include health check-ups undertaken by hospitals for employees of business entities, and for health service provided under health insurance schemes offered by insurance companies.“(This) may not be advantageous in ensuring better access to healthcare for the common man, besides being a deterrent for the advocacy of preventive health,” he said.

The healthcare industry had recommended that the sector be given as much importance as roads, ports, highways, airports and information technology, as massive investment is required to raise the quality of healthcare in India.V Raja, president & chief executive, GE Healthcare South Asia, praised the Budget for its overall balance, but added that it should have granted infrastructure status to the healthcare industry.“This would have helped (the) healthcare industry have access to more funds, more benefits and thus resulted in increased and affordable healthcare to the masses,” he said.

Source:Mint

Indian Pharma & rural market strategy

If consumers in rural markets can afford soaps, shampoos and more recently even water purifiers, they can afford to spend on healthcare too. Pharmaceutical firms—both Indian and foreign—have been trying to increase their presence in this market. And they are trying new models. The latest entrant to this market is Aventis Pharma Ltd. It is scaling up its pilot project, currently on in three states, and extending it to three more states. After conducting workshops for around 3,000 doctors till now, its target is to reach out to 100,000 doctors in five years.

In India, doctors are key to the pharmaceutical market as they prescribe specific medicine brands to their patients. Conventionally, firms employ a field force to market their brands to doctors. In rural areas, that would be prohibitively expensive in relation to the potential returns. So firms have devised new methods of reaching out to them. Holding workshops is one. Another is to outsource the field operations. Novartis India Ltd hires “health advisers” who go to villages and also bring doctors for health camps who prescribe medicines. Dr Reddy’s Laboratories Ltd has a contracted field force for the rural market.

Another key aspect is to keep the cost of medicines affordable for rural areas. Aventis has set up a new business unit, in which drugs will be branded under the brand name Hoechst and sold in rural markets. These will be generic drugs that are most commonly prescribed in these markets. The idea is to remain competitive compared with unbranded generics. The accent at present is on infectious diseases that are more prevalent and are also cheaper to treat. But companies will be eyeing the spread of lifestyle diseases such as diabetes and cardiovascular-related ailments that are being reported to be on the rise in rural areas too.

The overall market potential seems sizeable on paper. Firms cite figures of 65% of the population not having access to medicine, and that 70% of the population lives in rural areas and account for 60% of national disposable income. And the rural market is estimated to contribute around 20% of total pharmaceutical sales. For large firms, the contribution is unlikely to be significant yet. But that will change. They just need to emulate the success of consumer goods firms, which get at least 50% of their sales in some products from the rural market.

Source:Mint

Pharma export certificates to be issued by Centre, not states

Indian drug firms will soon have to approach the Centre rather than state authorities to get their facilities and export products certified, a move that industry players say could streamline the regulatory process for pharmaceutical sales overseas but add to delays.

The Certificate of Pharmaceutical Product (Copp) and good manufacturing practice (GMP), as laid down by the World Health Organization (WHO), will be issued by the national regulatory authority or the Drugs Controller General of India (DCGI) from 1 October, the government said in a notification last week.
Copp is mandatory in many countries that require WHO accreditation for products being imported. It will now be issued by the Central Drugs Standard Control Organisation (CDSCO).

The decision to take back the authority from the states was made during the 40th drug consultative committee (DCC) meeting in June, after several issues raised by WHO over the issuance of these certificates.“The WHO has time and again expressed concerns on the implementation of the WHO certification scheme on the quality of pharmaceutical products moving in international commerce,” the government said in the notification.

“The standard for giving Copp certificates by the states is lax and if tomorrow the WHO comes and audits the facilities, we can have problems,” said a senior official with the health ministry who did not want to be named.
Indian drug firms have had issues with foreign regulators in the past year over standards at their manufacturing plants.

A year ago, the US Food and Drug Administration (FDA) issued warning letters and import alerts on Ranbaxy Laboratories Ltd for deviations from good manufacturing practices after it audited the firm’s plants at Paonta Sahib in Himachal Pradesh and Dewas in Madhya Pradesh.The Indian pharmaceutical exports council, Pharmexcil, says the new system would help streamline exports. “This is a welcome step by the DCGI. It will help in the international market since it maintains uniformity and transparency,” said P.V. Appaji, executive director, Pharmexcil.
There were concerns, however, that possible delays at the Centre in issuing the certificates would lead to a delay in exports, he said. Till February, India’s pharmaceutical exports were worth Rs38,000 crore, a 30% growth over the previous fiscal year.

Small scale industries, too, are worried the move could hamper their exports.
“This decision of creating non-tariff barriers of centralizing issuance of Copp is just to please the MNCs (multinational companies), to kill the export competitiveness of the small sector against public interest,” said Lalit Kumar Jain, senior vice-chairman, SME Pharma Industries Confederation (Spic).

Indian pharma industry may grow around 13% in 2009

Indian pharma industry is likely to grow by 12-13% in 2009 against earlier projections of 15% due to the global economic meltdown, a research firm has said.“In 2009, the Indian pharma industry may see a growth of 12-13%, as against our earlier forecast of 14-15%, due to the macroeconomic condition that we are having,” ORG IMS Research managing director Sameer Savkur said at a conference here.
Mumbai-based ORG IMS Research Pvt Ltd is a joint venture of AC Nielsen ORG-Marg and IMS Health, the UK.

“Global pharma growth has been declining in the past five years. There is only a small impact on India. It will see double-digit topline growth,” IMS Health vice president (Europe) Graham Lewis said.

Lewis said there has been a significant amount of restructuring in the global pharmaceutical industry, with smaller companies running out of cash and bigger companies merging with each other.

The Indian pharma industry, which grew by over 10% last year, is likely to see a marginal 1-2% spurt in growth in the next four to five years, Savkur said.
The industry grew by 10.2% in 2008 due to some extraneous circumstances, he said.
He, however, termed the Indian pharmaceutical industry as “promising”, and estimated its size to touch $30 billion by 2020.

Chronic therapy will continue to be a key growth driver, Savkur said, adding that companies are focusing on extra-urban markets as these contribute about 40% to their turnover.

Antibiotics rule pharma retail market

NEW DELHI: The first quarter (January-March) of this year has witnessed a change in the domestic pharma retail market with antibiotics and anti-bacterial drugs dominating the show in top 10 brands.

At least four major antibiotic and antibacterial drugs are figuring in the top pharma brands during the quarter for perhaps the first time. These include Augmentin (manufactured by GlaxoSmithKline), Mox (Ranbaxy), Zifi (FDC Ltd) and Taxim (Alkem).

Augmentin is ranked four with cumulative sales of Rs 27.4 crore, Mox is the fifth largest drug with cumulative sales of Rs 26.6 crore, followed by Zifi at number seven position (Rs 23.6 crore). Taxim — another antibiotic medicine, is the ninth largest, netting sales of Rs 22 crore in January-March quarter.

All these drugs have also shown a huge double-digit growth, with anti-bacterial medicine Zifi growing by nearly 40% during the quarter (37% in March alone) and Mox netting 30% growth. Even in March, the rankings are pretty similar to the quarter, with Augmentin the fourth largest drug, followed by Zifi, Mox and Taxim at number 9 slot.

Doctors attribute the growth in sales of these drugs to the fact that these antibiotics are used to treat a wide variety of infections, and do not have many side-effects. Last year (January-December 2007), Taxim was the fifth largest drug followed by Augmentin.

During the first quarter of 2008, cough and cold medicine Corex was the number one brand with sales of Rs 36.65 crore, followed by painkiller Voveran. During March alone Voveran had marginally higher sales of Rs 10.54 crore as against Corex, which registered sales of Rs 10.49 crore.

Interestingly, the growth of the industry is mainly driven by the chronic segment (like cardio-vasculars, diabetics, central nervous system), which have grown by 17-18% last year. Against this backdrop, offtake of acute segments (anti-infectives, gastro-intestinals, nutritionals) has been slow and grown by 10-15% only, industry experts said.

The domestic pharma market with a size of Rs 35,000 crore is largely fragmented, with many small players. Biggies such as Cipla and Ranbaxy are battling for market shares. For some time now, Cipla has been leading the pack with a market share of 5.64% (during the quarter), followed by Ranbaxy and GSK.

Source:TNN

Pharma industry untouched by recession

The global recession has affected all sectors, expect for the pharmaceutical industry. This leaves a wide choice for the pharmacy students.
This was the opinion of all the heads from the four premier pharmacy associations -- IPA, IHPA, IPGA and AIDCOC -- at a symposium on pharmacy studies held recently at GITAM Institute of Pharmacy.

If this is the scenario, then the young minds who take up pharmacy as study need no longer look at the discipline as fallback option in the event of not securing a seat in medicine or engineering.

Big picture
After a modest beginning, the Indian pharmaceutical industry is today the fourth biggest industry in the world as far as volume or production is concerned and 14th in terms of value. The Indian industry is USD 8.4 billion worth at present. According to the Chairman of Indian Pharmaceutical Association T.V. Narayana the patent regime has brought business worth USD 5 billion and has also triggered the growth of the pharma industry as innovative industry. The patented drugs have recorded a growth of over 37 per cent in the last couple of years.
He says that by 2012, USD 80 billion worth of patent protected drugs in the US would go off patent. The Indian companies are in a position to tap this generic market with reverse engineering skills and low cost factor. The present share of USD 8.4 billion would rise to USD 60 billion by 2020, and this would give fresh opportunity to about five lakh pharmacy professionals.
Prof. Narayana also informed that the much-neglected research and development and DDD (drug, discovery development) sector is also being suitably addressed. “The government has sanctioned about Rs. 150 crore under the Department of Science and Technology for research. The research and DDD segment itself would need about 2 lakh professionals,” he said.

Why India?
Many factors contribute to the growth of the pharmacy sector in India. The factors that mainly contribute are: Vast technical pool and skilled manpower, low cost factor, availability of state-of-the-art facility, vast pool of English speaking manpower, reverse brain drain and vast network of export bases in South America, Africa, Europe and China. India also has the highest number of USFDA (US Food and Drug Administration) approved plants.

Pharmacy study
The pharmacy study in India can be broadly classified into two-year diploma, four-year degree in pharmacy (B. Pharm), two-year post-graduate degree in pharmacy and Pharm D.
While the diploma focuses on hospital and community pharmacy, the degree and PG courses focus on pharmaceutical industry, enforcement agencies and teaching prospects. These apart, the Ph.D programme is always open to the students with research bent of mind.
The Pharm D is the new concept that has been introduced lately. This is a six-year integrated course and students can join after plus two. The syllabus for this course has designed by Pharmacy Council of India (PCI) and is in tune with the international curriculum. Students can join MS programmes in foreign countries after completing this course.

The PCI has also decided to revamp the syllabus for the diploma, degree and PG programmes to suit the industry requirement. Prof. Narayana however, advises the students to take up three-month certificate courses offered by a few pharmaceutical companies to gain experience and gear up for the industry requirement.
He also suggests that students should join pharmacy colleges that are recognised by PCI and are rated by the National Board of Accreditation.
Options

The options for pharmacy students are wide and are well spread within the industry itself. After passing out the students can join any pharmaceutical industry, regulatory and enforcement bodies, community pharmacy, teaching, hospital and clinical pharmacy and research and development sector.
Within the pharmaceutical industry the options could vary from manufacturing to quality control and from regulatory to research and development. “The Medical Council of India has now made it mandatory that all hospitals attached to medical colleges should have a clinical pharmacy department. This regulation would also add up to the job opportunities,” said Prof. Narayana.

Source: The Hindu

Indian drug market to triple to $ 20 bn by 2015: Report

The Indian pharmaceutical market is expected to triple to USD 20 billion by 2015 from USD 7.1 billion in 2007 with a CAGR of 12.3%, and move into the world’s top 10 markets. The commercial attractiveness of India as a “market” is a key factor influencing India’s attractiveness as a “clinical trial destination” , says a FICCI-Ernst & Young Report on Compelling Reasons for Doing Clinical Research in India.

The report notes that In 2015, India could be a potential USD 8 billion market for MNCs with patented drugs accounting for nearly 8-10 % of the total market. The reasons are:

The advent of the product patent regime in 2005. The patent infrastructure in the country has been appreciably upgraded over the past few years to support new laws with the addition of patent examiners, decentralization of the filing process and digitization of records. Patent-protected products have the potential to capture up to 8-10 % share of the total market by 2015, implying a market size of USD 2 billion.

The population in the highest income class is expected to grow to 25 million in 2015 from 10 million today, which will drive the affordability of high value patented drugs. MNCs already present are further consolidating their presence in India while new entrants are increasing.

MNCs are increasingly restructuring their operations with global parents increasing their equity stakes in their Indian affiliates. Companies such as BMS and Merck that had exited the Indian market have staged a re-entry . MNCs are acquiring Indian companies to expand their presence, e.g., Daiichi and Ranbaxy.

The FICCI-E&Y report mentions that in addition, India also has a significant cost arbitrage in the conduct of clinical trials, including infrastructure, operational, patient recruitment, drug, manpower , data management and processing costs.

Indian allied service market is growing at a CAGR of 21% as compared to 7.5% globally. The allied services outsourced market in India was estimated to be USD106m (2008) (1), growing at a rate of 21%. Although initially sponsors and CROs were driven to offshore locations due to their cost advantage , the focus has now shifted to the quality of delivery and responsiveness to business uncertainties .

India, due to its proven track record of managing IT/ITES work and growing domain expertise, has emerged as an attractive destination for the entire segment.

The FICCI-E&Y report states that India offers a conducive business environment to meet the emerging requirements of the allied services market . Its cost leadership and system capabilities, coupled with an abundant skilled and English-speaking talent pool, has made it a destination of choice for offshoring allied services

Source: ET Bureau