Indian pharmaceuticals industry?s odd relationship with global drug regulators?US Food and Drug Administration (USFDA) and European Medicines Agency EMEA)?is becoming a roller-coaster ride. If the industry is rejoicing the fact that it has recently filed the maximum number of drug master files with the American drug regulator?a document which provides the regulatory authority with detailed information about facilities, processes and articles used in the manufacturing, processing, packaging, and storing of medicines?and is in a good position to capture a significant portion of the market when drugs worth $60 billion go off-patent in the next four years, industry?s encounters with drug regulators and subsequent reprimands are getting frequent.
For instance, the American drug regulator has asked Glenmark Generics, the US subsidiary of Glenmark Pharmaceuticals, to stop selling unapproved nitroglycerin tablets for chest pain in the US market. In a warning letter issued to Glenmark, the drug regulator has explicitly stated that the nitroglycerin tablets have not been proven safe and effective.
Similarly, Ranbaxy Laboratories has failed to get approval from the USFDA for introducing Tamsulosin Hydrochrolide, the medicine used in treating enlarged prostate in the US market. A Ranbaxy spokesperson said, ?We regret that despite our best efforts, we were not able to get an approval for the subject product, and hence will not be in a position to launch the product. However Ranbaxy through its settlement, did enable the entry of an alternate generic, that would benefit the consumers.? Interestingly, another US-based company Impax announced the launch of the drug after getting the USFDA?s nod. It has got the exclusive marketing rights for a period of 180 days. In the US, the market size of the drug is about $1.2 billion.
Among others, World Health Organisation (WHO) has recommended to stop procurement and to suspend of all lots of SHAN 5 vaccine from Shantha Biotechnics, pending ongoing investigations. Healthcare professionals from Nepal and Colombia had reported the formation of flocculation?white sedimentation?in the vaccine, thereby raising questions on the quality of the drug.
Though the suspension is precautionary, the WHO statement is damning in itself: ?Countries are advised to put any remaining vaccine in quarantine until further notice…The available information to date is insufficient to make conclusions about the potential causes of the flocculation as reported.? SHAN 5 is a combination of five vaccines used in immunising children against diseases?Diptheria, Tetanus, Pertussis, Hepatitis B and Hemophilus Influenza B.
Be it marketing of unapproved new drugs in the regulated markets, or not adhering to the norms laid out by the global drug regulators, especially the good manufacturing practice, the harsh reality is that the Indian pharmaceuticals industry is learning to comply with the regulatory norms of drug regulators the hard way. As the industry understands the complexities of regulated markets, several questions arise. Are Indian drug companies faltering when it comes meeting stringent quality norms, especially quality control norms? Or is it a case of Indian companies failing to understand the complexities of regulated markets, especially the US and European Union markets?
It is obvious that the Indian pharmaceuticals industry will strongly defend its position. Industry?s counter argument is that the entry of Indian products in the developed markets has established its quality standards as required by the regulatory authorities. Cadila Pharmaceuticals chairman Indravadan A Modi, says, ?Indian pharmaceutical companies have thoroughly understood the complexities of the regulated market. For that reason only, their drug master files are approved by the regulatory authorities.? About frequent encounters with global regulatory agencies, he says, ?One shall have to be prepared to face such encounters as many factors work. Particularly, the existing manufacturers in the regulated markets do lose their major share and it is a natural phenomenon that one would use all possible ways to defeat the competition.?
Sun Pharmaceuticals vice-president of investor relations, Uday Baldota, feels that the ambitious forays into the US and EU markets are strong indicators that Indian pharmaceutical companies are able to understand the complexities of regulated markets. He says, ?Else, to sustain revenues of 30-50% from developed markets for most of the top Indian companies would not have been possible.? In his opinion, regulatory agencies publish ?problem? inspections, but not the inspections that companies pass. Highlighting and focusing on only the ?negative? encounters in isolation is extremely unfair and partial to the industry. These have to be looked at as a proportion of total ?encounters (read inspections)?, and with the evolving trend.
More importantly, this has to be compared with the experience of these regulatory agencies with companies from their home countries or countries other than India to assess whether encounters with Indian companies are ?high?. ?My guess is that this proportion is extremely low for Indian companies, perhaps well within a range that would be defined as ?normal?, if not better, for any of these regulatory agencies irrespective of the country of origin of the companies,? Baldota reiterates.
Predictably, it is tough learning for the Indian pharmaceuticals industry. Most large regulated markets are either already or moving towards becoming non-branded generics markets. These markets are becoming more and more lucrative as many patents are getting expired, say worth $60 billion in near future. Alongside, regulatory norms are becoming stringent and involve greater time, money and scientific resources. ?With the regulatory agencies becoming increasingly strict, most of the top generic companies (including Indian) have faced issues regarding their manufacturing facilities in the US,? says Ajit Mahadevan, partner, life sciences practice, Ernst & Young.
Generic companies (Indian and Chinese) have also faced issues while exporting medicines to Latin America/Africa via Europe; this is due to enforcement of European Commission?s Regulation 1383/2003 that allows seizure of medical shipments that are suspected of containing counterfeits. Although these medicines are legitimate in the destination country, since these products are on patent in Europe the authorities have invoked this regulation and seized these shipments.
Still, healthcare analysts feel that the large number of abbreviated new drug application (ANDA) approvals, US /European approved plants and drug master filings reflect the understanding of the US/EU regulatory requirements by Indian companies. An effective way to manage these complexities is to assemble a strong resource pool with a good understanding of the local market conditions?intellectual property (IP), regulatory, pricing and marketing and distribution. Each of the regulated markets, the largest ones being in the US, EU and Japan, has its own clearly defined IP infrastructure and regulatory systems for quality control. Each market has its own regulatory authority and drug approval mechanism. A company penetrating into any of these markets needs to have a thorough understanding of the local framework to make a well planned entry. In addition to this, the company also needs to closely monitor patent exclusivities, extensions and expiries, make data master file submissions and address the queries of the regulatory authorities.
With governments across the globe looking at reducing the healthcare expenditure, they are increasingly looking at a generic-generic model to provide them with reduced healthcare costs. This offers countries such as India with a low cost base an opportunity to increase their market share. However at the same time, this model further increases the pressure to adhere to stringent regulatory norms.
Explaining the frequent encounters with drug regulators, Pharmaceuticals Export Promotion Export Council (Pharmexil) executive-director PV Appaji, says, ?Our recent study on regulators? actions on manufacturers whether in the US or outside, revealed that it is within the general norm and we have to be ready to learn more and more with our increasing presence. Most large regulated markets are moving towards becoming non-branded generics markets. This could be a boon for Indian generic companies. There is very good possibility and opportunity, but we should be ready with extra facilities and capacities with international standards to meet the demand.?
While tougher regulatory norms are putting pressure on Indian pharmaceutical companies, there is subtle optimism emerging in industry circles to not only overcome these hurdles, but also capture emerging opportunities in the times to come.