Global reach of India drug producers grows

January 5, 2014 2:37 pm

Global reach of India drug producers grows

By Andrew Jack in London

India is producing almost as many medicines for the UK as those manufactured within Britain itself, according to figures showing the growing influence of Asia in the global pharmaceuticals market.Data from the Medicines and Healthcare Products Regulatory Agency, the London-based medicines watchdog, show it has licensed Indian factories to produce the finished form of 3,685 drugs compared with 3,815 made within the UK.

They place Indian companies far ahead of all other foreign producers for British patients – led by companies in Germany, Ireland and France – and reflect estimates that its fast-growing manufacturers are responsible for a quarter of all medicines consumed in the country.

While India has long produced raw materials and the “active pharmaceutical ingredients” to supply others making finished medicines, the statistics show the country’s expansion as fully fledged producers.

The British statistics mirror high and rising penetration rates by Indian producers in other industrialised countries around the world and have raised some concerns over quality as manufacturing shifts beyond national boundaries.

Two large Indian generic drug producers – Ranbaxy, owned by Daiichi Sankyo of Japan, and Wockhardt – in recent months received US and UK regulatory bansrespectively on the import of some of their products following quality concerns including fabrication of tests on their ingredients.

However, Gerald Heddell, director of inspections, enforcement and standards at the MHRA, stressed that the number of problems identified by regulators in Indiawas in proportion to the volume of medicines they produced.

“When we look back over 110 inspections we conducted over the last two years in India, we had significant concerns with 9 or 10 companies,” he said. “That does not represent a statistically higher proportion than in other parts of the world. India stands out because it is just such a big supplier.”

Arun Sawhney, Ranbaxy chief executive, stressed his co-operation with US regulators in meeting their requirements including the lifting of a ban on some products.

“The global pharmaceutical landscape is changing and we have to change with it,” he said.

“The expectations of regulatory agencies all over the world are increasing and clearly, we have to continue to raise the standards of our processes to be ahead of these changes.

“We are certain that the efforts under way in this regard will enable us to emerge stronger in our standards of quality and compliance.”

Although most Indian pharmaceutical companies make off-patent generic drugs, they also supply products to those making innovative medicines.

A separate analysis conducted by Withers & Rogers, a legal firm specialising in intellectual property, showed an increase from 160 to 450 annual patent filings by Indian companies over the past decade.

However, most have been technologies such as manufacturing processes for existing drugs, new formulations and crystalline forms rather than the development of novel compounds.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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