MADE IN INDIA
"Our industry is starting to understand that if you want to grow, you need to shift from vanilla generics to value-added generics,"
says Daara Patel, secretary general of the Indian Drug Manufacturers' Association. "Outside of the US, India already has the
largest amount of companies filing DMFs and ANDAs, as well as the largest amount of US FDA-approved plants (90), not to mention
more than 200 plants approved by the WHO. So yes, we are doing well: if you look at numbers, the entire sector has grown to
become a $20 billion-plus industry, of which almost 40% to 45% is exports. And thanks to our infrastructure, we have the capacity
to grow more."
B.P.S. Reddy, MD, Chairman of Hetero
One Indian manufacturer that has obtained a great level of respect from the industry, and has invested roughly $500 million
in infrastructure in the last three years alone, is Hetero Group of Companies. Dr. B.P.S. Reddy, chairman and managing director,
shares his view on how he became one of the largest HIV drug manufacturers in the world. "Hetero is a vertically integrated
company that started from API manufacturing. A first path we have taken is the one of backward integration, in order to better
compete with Chinese players. Hetero has also started complete Greenfield projects to supply the North American market. After
an upgrade in 2005, we have now submitted roughly 50 ANDAs from this facility," Reddy says. Apart from the world-class infrastructure,
Reddy's previous position as chief technologist at Dr. Reddy's Laboratories underpinned his strategy to maintain a strong
focus on R&D. The leadership in HIV aside, Hetero's other achievements include a licensing deal with Roche in 2005, making
it one of the first companies to make a reliable generic version of Tamiflu, later also deployed for swine flu. "It was a
very important milestone. Roughly 60 countries, especially underdeveloped and developing ones, were addressed as per our agreement.
I felt that MNCs had come to realize that Indian companies will be able to meet their expectations. This does not only apply
to Hetero, but contributed to the credibility of Indian pharma as a whole," he says.
Indian pharma is largely indebted to the excellent manufacturing experience the country has accumulated. "GSK did a study
a few years ago, that showed that plants with identical machinery, and identical capability, set up in India, and set up in
Europe, will have a 40% difference in cost," says Dilip Shah of the IPA. India-headquartered Micro Labs, for example, has
grown into a company with a presence across the entire value chain—from R&D, APIs, and finished formulations, to marketing
and distribution in India and overseas. A series of ongoing investments and expansion efforts have pulled the company into
the top 20 of the Indian Pharmaceutical Retail Industry. "Last year there was an expansion of the company's manufacturing
assets in India. Most notably, Micro Labs established a state-of-the-art API unit. In terms of research and development, the
company created two facilities, one in Bombay and the other in Bangalore," says Dilip Surana, Micro Labs' managing director.
Dilip Surana, Managing Director of Microlabs
"The purpose of establishing the API unit was to become a fully integrated pharma company, which is useful especially when
entering highly regulated markets. The rationale was both to guarantee supplies and bring down costs. API standards for regulated
markets are very stringent and therefore costs are higher," Surana continues. "In some cases, the APIs produced in India are
above the standards of regulated APIs in terms of both quality and purity. However, they cannot be sold without the required
documentation. Therefore, having its own API unit allows Micro Labs to guarantee supply of regulated APIs and focus on regulated
Now focused on selling generic drugs through partnerships in regulated markets such as Europe and the US, Surana estimates
that the company's export revenues will soon exceed those generated within India. "I was never worried about the 'Made in
India' label," says Jeffrey Morrod, India's managing director of US-based Watson Pharmaceuticals. Morrod has nothing but praise
for the strong R&D and manufacturing set-up Watson now has in India, and is proud to have acquired formulations and API plants
from key players such as Dr. Reddy's. "Coming to India was not daunting; on the contrary, it was a fantastic opportunity,"
While top foreign vaccine manufacturers such as GSK and Sanofi may be present in India, the vaccines industry still remains
primarily dominated by Indian players. Of the global requirements of basic vaccines procured by U.N. agencies for children,
Biotechnology Industry Organization (BIO) estimates that 60% to 70% is being catered by the Indian vaccine industry. "In terms
of coverage per number of children, India surpasses everyone, with figures as high as 60 to 70 million children being reached
through UNICEF alone, every year among the newly born," says Dr. Rajesh Jain, joint managing director of Panacea Biotec, one
of India's leading vaccine players that has just passed the $220 million (approximately Rs. 1,000 crore) turnover milestone
in February 2011.
Rajesh Jain, Managing Director of Panacea Biotec Limited
Capitalizing on their cost-effectiveness, manufacturing expertise, and the rising global demand for affordable vaccines, Indian
vaccine manufacturers have become crucial partners in several global initiatives. For Panacea Biotec, the breakthrough was
its agreement with the government of India in March 2010 to manufacture H1N1 flu vaccine Pandyflu. "In my 20 years of experience,"
Jain recalls, "I experienced this moment as a renaissance for the entire Indian vaccines industry." For Jain, it started a
new chapter and a reference base to engage in further government initiatives. "Succeeding in vaccines is finding the way to
strike the balance between the nature of the industry, the need for capital, the ROI time, the right product mix, and an attractive
price to eventually ensure product procurement by the government. A company that manages to fit all these pieces in one puzzle
will make a great company in the developing world," Jain explains. Home to many local success stories, including top names
such as the Serum Institute of India, Shantha Biotech (now part of Sanofi-Aventis) and Bharat Biotech, the vaccines niche
makes up the lion's share (55%) of the Indian biopharma segment, according to the Association of Biotechnology Led Enterprises