7th Annual Pharmaceutical Leadership Summit & Pharmaleaders Business Leadership Awards 2014 Friday, 26th December, Hotel Sahara Star, Mumbai, India Make In India – Healthcare Reforms Insurance,Innovations,Investments & Infrastructure “Empowering India’s Developing Healthcare System” Investing the Healthcare Solutions of Tomorrow in difficult Times

1. Make in India - Health Reforms, Insurance,
Innovations, investments & Infrastructure
INDIAN DRUG MANUFACTURERS’ ASSOCIATION
(IDMA)
DAARA B PATEL
SECRETARY-GENERAL
7th Annual
Pharmaceutical Leadership Summit &
Pharmaleaders Business Leadership Awards 2014
26 December 2014

2.  IDMA’s HQ
 80 % Pharma
Corporate Office
are located
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3. INDIAN DRUG MANUFACTURERS’ ASSOCIATION
Founded in 1961 – now in 53rd year of service as
premier Association of the Indian Pharma Industry
Regarded in Government, Media & Industry Circles as
the ‘Voice of the National Sector’
7 Region-wise State Boards at Gujarat, Tamil Nadu &
Puducherry, Himachal Pradesh & Uttarakhand, West
Bengal, Madhya Pradesh and Telengana. Andhra
Pradesh, Karnatakaand Goa (under formation)
20 Sub-Committees, headed by Experts
Membership Strength – over 800 Members
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4. INDIAN DRUG MANUFACTURERS’ ASSOCIATION
Publications: IDMA Bulletin (Weekly), Indian Drugs
(Monthly) & Annual Publication
Awards presented on Annual Day for Quality Excellence,
Best Patents, Quality Research
At IDMA- PAC Awards for Eminent Analyst, Outstanding
Analyst, Young Analyst
Regular Seminars/ Workshops on Regulatory, Technical,
Medical affairs, Harmonization projects with IPC, US FDA,
USP, EDQM, ANVISA
For eg., 17th IDMA-APA Pharmaceutical Analysts
Convention was held on 26th and 27th Sept at Mumbai
Theme: ‘Challenges in Global Quality Management’ –
Chief Guest: Dr Ronald Piervincenzi, CEO, USP
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5. INDIAN PHARMA INC
 Knowledge based Industry and one of the world's largest
and most developed
 Over 10,000 manufacturing units
 About 77% units make Formulations and about 23% units
make APIs
 Over 60,000 formulations in market covering almost every
therapeutic segment with about 10 to 200 brands per
molecule
 India with a population of 1.2 Billion is a big market for
Pharmaceuticals
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6. INDIAN PHARMA INC
(contd…)
 Medicines constitute only about 15% of total healthcare
spend in India
 About 90% of India’s pharmaceutical market is made up of
branded generics and has the potential to grow at an
accelerated 15 to 20% CAGR in the next five years.
 Value of India’s Pharmaceutical Market - US $ 32 billion
& set to grow to US $ 50-60 billion market by 2020
 Globally ranks 4th largest in volume and 12th in value
 Every third tablet consumed globally is made in India
 One in every three children around the world is immunized
by vaccines made in India
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7. INDIAN PHARMA INC
(contd…)
 Exports to more than 200 countries, with major share in
regulated markets
 India’s five of the largest export markets are USA, UK,
Germany, Russia and South Africa
 Formulation Exports to USA at US$ 1.55 billion, to UK at
US$ 1.90 billion, to Australia at US$ 90 million 7
Exports drug intermediates, Active
Pharmaceutical Ingredients (APIs),
Finished Dosage Formulations Bio-
Pharmaceuticals, and Clinical Services
across the globe
Exports at US$ 14.6 billion in 2012-13 at
CAGR of 15.2 %

8. • India is now among the top five pharma emerging
markets globally
• Front runner in a wide range of specialties involving
complex drugs' manufacture, development and
technology
• Generics market in India expected to grow to US$ 26.1
billion from US$ 17 billion today.
• India with 192 approvals has about 41% of all ANDA
approvals (486) from US FDA during Jan - Dec 2013 –
the largest outside USA
• India has about 10,000 manufacturing units whereas
USA has about 2,500 manufacturing units
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INDIAN PHARMA INC
(contd…)

9. PHARMACY OF THE WORLD
Single largest supplier of generic medicines to the world
Supplier of 70-90% of essential medicines to developing
countries
80% of medicines for AIDS issued by MSF (Doctors
Without Borders) distributed in treatment projects in over 30
countries
Provider of 70% of treatment for 87 countries under
UNICEF, The Global Fund to Fight AIDS, Tuberculosis and
Malaria, the Clinton Foundation, etc.
Manufacturer of every fifth generic drug and every third
HIV drug consumed anywhere in the world
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10. INDIAN PHARMA – FUTURE POSITIVE
• The need to raise the global competitiveness of the
Indian manufacturing sector is imperative for the
country’s long term-growth.
• The National Manufacturing Policy is by far the most
comprehensive and significant policy initiative taken by
the Government.
• The policy is the first of its kind for the manufacturing
sector as it addresses areas of regulation, infrastructure,
skill development, technology, availability of finance, exit
mechanism and other pertinent factors related to the
growth of the sector.
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11. INVESTMENT OPPORTUNITIES
• India is expected to be the third largest global market for
APIs by 2016, with a 7.2% increase in market share.
• Indian pharma companies registered 49% of overall Drug
Master Filings (DMF) filed in the US in 2012.
• CRAMS estimated at $ 8 Billion in 2015, up from USD 3.8
Billion in 2012. The market has more than 1000 players.
• The formulations industry – India is the largest exporter
of formulations with 14% market share and ranks 12th in
the world in terms of export value.
• Double-digit growth is expected over the next five years.
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12. MAKE IN INDIA
• India’s manufacturing sector has tremendous potential for
growth, with over 800 million below the age of 35 or less and the
need for 700 million skilled workers by 2022
• India’s demographic advantage - our labour force - is young and
expanding much faster than the general population.
• India is in the enviable position of providing manpower, even for
the rest of the world
• Only accounts for 15% of GDP at present , vis-a-vis 34% for
China, 31% for South Korea and 22% for Germany – a lot of
catching up to do
• To achieve this:
 Govt. needs to work on curbing red-tapism
 Making legal compliance easier and transparent
 Amending regulations to make them more investor friendly
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13. REASONS TO INVEST
• India is expected to rank amongst the top three
pharmaceutical markets in terms of incremental growth by
2020.
• India is the sixth largest market globally in terms of size.
• India’s generic drugs account for 20% of global exports in
terms of volume, making the country the largest provider of
generic medicines globally.
• India’s cost of production is significantly lower than that of
USA and almost half of that of Europe.
• A skilled workforce as well as high managerial and technical
competence.
• Economic prosperity is likely to improve affordability for
generic drugs in the market.
• Approval time for new facilities has been drastically
reduced.
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14. GROWTH DRIVERS
• With increasing penetration of chemists, especially in rural
India, OTC drugs will be readily available.
• Pharma companies have increased spending to tap rural
markets and develop better infrastructure.
• Hospital business to increase from 13% in 2009 to 26% in
2020.
• Rise of lifestyle diseases in India is expected to boost industry
sales figures.
• Over US$ 200 Billion is to be spent on medical infrastructure
in the next decade.
• Rising levels of education are set to increase the acceptability
of pharmaceuticals.
• India’s patient pool is expected to increase to over 20% in the
next 10 years, mainly due to the rise in population.
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15. FDI POLICY
• 100% FDI is allowed under the automatic route
for greenfield projects
• For brownfield project investments, up to 100%
FDI is permitted under the government route
• The government may incorporate appropriate
conditions for FDI in brownfield cases, at the
time of granting approvals
• FDI is subject to applicable regulations and laws
• IDMA has suggested that a threshold limit of
about Rs. 1500 crores be applicable in
brownfield projects
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16. India's growing respect and
legal / regulatory framework
for IPR, favourable economic
policies and availability of
huge talent pool for
sustaining and growing
operations is making India an
attractive choice for global
pharma companies for
investment, tie-ups, mergers,
acquisitions.
THE INDIAN SCENARIO
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17. Because of patent expirations
of blockbuster drugs, Indian
firms are expected to actively
participate in the production of
generic version of these
products. Indian companies
are also ready with generic
version of biotech drugs.
Therefore, India will be able to
maintain a large basket of
quality affordable generics
with assured safety and
efficacy.
THE INDIAN SCENARIO
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18. ADVANTAGE INDIA
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19. • India is a world leader in anti-AIDS
and anti-TB segments and for some
of the latest medicines like
Glitazones, Celecoxib, Statins,
Montelukast and many anti-cancer
drugs
• Bill Clinton's foundation, Clinton
Health Access Initiative (CHAI) got
further discounts from Indian generic
manufacturers that reduced the cost
of combination drug treatments for
AIDS, which can reach thousands of
dollars per year in the West, to as
low as $120 a year per patient.
• Many Indian companies are part of
this agreement where Lamivudine,
Stavudine, Zidovudine, Nevirapine
will be supplied to a few African
countries.
ADVANTAGE INDIA
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20. AFFORDABLE GENERICS
• Lower prices is a significant factor in the rapid uptake
of generics.
• In Europe generic products contribute to 50% of
market sales by volume, but contribute only 20% to
overall value sales, suggesting the huge cost benefits
brought about by generics.
• In US, generics contribute to three fourth of
prescriptions, but in value terms, the generics are just
one tenth of the market, mirroring the cost benefits
typically generated by generics.
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21. GENERICS – WHO FACTS
Global health situation and trends 1955-2025
• Global population was 2.8 billion in 1955 and was
estimated by WHO to reach about 8 billion by 2025
• However, latest data reveals that it is already 7.28 billion
today
• The proportion of older people requiring support from
adults of working age will increase from 10.5% in 1955
and 12.3% in 1995 to 17.2% in 2025
• In 1955, there were 12 people aged over 65 for every 100
aged under 20. By 1995, the old/young ratio was 16/100;
by 2025 it will be 31/100
• By 2025, increases of up to 300% of the older population
are expected in many developing countries, especially
in Latin America and Asia
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22. GENERICS TO THE FORE
• Will exceed 20% of spending in most developed
markets
• Increased generic spending in the next five years will
be driven by generic competition in new molecules due
to patent expiry.
• U.S. will see the largest expansion of generics market
spending, but 7-8% gain will largely be from new
generics as U.S. pharmacists already dispense
generics, when available
• Japan will remain the developed market with the lowest
generic share despite significant policy incentives to
increase generic prescribing and dispensing
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23. LARGEST SUPPLIER TO UNICEF
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• India has consistently been the largest
supplier to UNICEF since 2007.
• India was the largest supplier country in
2013, with $676 million worth of supplies
such as vaccines, pharmaceuticals,
nutrition, medical supplies
• Of the 2.83 billion purchases by UNICEF
in 2013, more than 41% were from India
• Serum Institute of India Ltd., an IDMA
Member supplied vaccines / biologicals
worth $367 million, making it the largest
supplier in India
• Other significant suppliers include
Hetero Labs, Ranbaxy Labs, Aurobindo
Pharma, Haffkine Bio-Pharma Corp.,
Micro Labs etc, all Members of IDMA.

24. INDIA AS PHARMACY OF
DEVELOPING WORLD – Examples
• Main procurement agencies for
developing countries depend
overwhelmingly on India
• 70-90% of essential medicines of
developing countries comes from India
• 50% of medicines procured by UNICEF
for developing countries are from India
• 75-80% of medicines distributed by
Dutch-based International Dispensary
Association (IDA) Foundation, the chief
medical supplier to developing
countries is sourced from India
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25. INDIA’S SUPPORT TO USA
• Over 40% of generics prescribed are from India
• India’s Generic drug producers have managed to drastically lower
prices of a range of therapeutics and saved millions of lives
• To ensure continued supply of the low cost quality generics from
India, the US FDA has opened India office
• 1 out of 5 US FDA inspections for approvals are in India
• 80% of all retail prescriptions filled in USA are for generic drugs
• 2013 report on Generic Drug Savings in US shows generics saved
the US health system a staggering $1.3 trillion in the last 10 -12
years
• Very Critical to President Obama's affordable healthcare
programme
• To overcome the shortage of cancer drugs J & J’s Doxil in USA,
the US FDA sought Sun Pharma’s help in providing their
chemotherapeutic drug Lipodox drugs from India
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26. CHALLENGES
• India is the 4th largest manufacturer of medicines in the world by
volume and has already adopted ' Make in India Strategy'
successfully in the context of Pharma exports
• However we are heavily dependent on APIs from China for our
formulation business. This vulnerability needs to be corrected by
heavy investment in the manufacture of APIs
• Pharma R& D is gradually moving from chemistry to biology and
it is estimated that >40% of new drugs likely to be approved by
USFDA in 2015 are going to be biologics
• Zydus Cadilla has already developed a Biosimilar for Abbott's
block buster drug Humira which has a global sales of $2 billion
• Indian companies should focus on developing and manufacturing
biosimilars, likely to be $40 billion global opportunity by 2020.
• India can aim for about 10% of this market
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27. NEED FOR KEY ENABLERS
To achieve global leadership position in Pharma, we need
following key enablers:
 As a science based industry, Innovation forms core of its growth
strategy
 An ecosystem for innovation where intellectual property is
adequately protected and enforced is a key requirement
 Predictable and sustainable pricing policy based on scientific
discipline like Pharmacoeconomics
 Regulatory framework harmonised with global practices and
formation of Central Drug Authority on the lines of USFDA
 Strong political will to repel outdated laws e.g. amendment to
labour laws, land acquisition, D&C Act, SPE Act etc
 Ease and speed of getting licenses for manufacturing – preferably
single window
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28. NEED FOR KEY ENABLERS
 Consistency in SEZ policies
 Quick passage of GST , with uniform single level of taxation in
pharma which will make India one common market and will make
significant positive impact on Pharma logistics and supply chain
 Increase in government healthcare budget from 1% of GDP to at
least 4-5% ( global average 10 to 14% of GDP).
 Expansion of health insurance so that people do not have to pay for
medicines from their own pocket
 Commence massive reversal of brain drain and talent acquisition
programme for our scientists working in US, Europe etc as is done
by Singapore and China
 Increase in govt. healthcare budget from 1% of GDP to at least 4-5%
( global average 10 to 14% of GDP)
 Expansion of health insurance so that people do not have to pay for
medicines from their own pocket as 80% of them do so now
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29. HEALTHCARE INSURANCE REFORMS
• Healthcare in India is planned to be provided through:
 State responsibility for health care
 Free medical care for all
• Government has set up Rashtriya Swasthya Bima Yojana to
provide health insurance coverage for Below Poverty Line (BPL)
families
• Though not the first scheme by Govt. this scheme empowers the
beneficiary by allowing choice with freedom of choice between
public and private hospitals
• This scheme is a win-win for the user, insurer, hospital, NGO,
Govt etc – user has choice, insurer is paid premium for each
household enrolled for RSBY, hospital gets larger pool of
patients, NGOs and MFIs are paid for their services and the Govt
gets to cover a larger number of users by limiting the maximum
limit
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30. HEALTHCARE INSURANCE REFORMS
• Pradhan Mantri Swasthya Suraksha Yojana, is
another scheme that aims at correcting the
imbalances in the availability of affordable healthcare
facilities in the different parts of the country in
general
• Under the Scheme, six medical institutions on the
lines of AIIMS, Delhi are being set up in different
states
• Also upgrading 13 existing Government medical
college institutions in the initial phase
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31. ISSUES
• All projects/proposals to be considered on a long
term basis (for next 10-15 years) as Pharma industry
has a long gestation period
• Understanding between Centre and States required
for addressing issues of proper land allocation at
long lease/ subsidized rates to Pharma industry
• Land cost can be subsidised by Central to State
Govt. who will allocate land at low cost to the
industry with extended period of repayment
• Train Bank officials to appreciate Pharma industry
requirements and functioning
• Banks should provide soft loans for Infrastructure
changes @ 6% p.a. in line with international rates
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32. NEW INDIAN GOVERNMENT
• A new popular Government under the Leadership of
Shri Narendra Modi as Prime Minister of India has
been installed in May 2014
• The new Indian Government is keen to improve
healthcare facilities and health of the people.
• Is considering identifying 50 drugs for various
diseases and provide free medicines to all
• IDMA can act as a vital link in Pharmaceuticals
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33. INDIAN PHARMA – FUTURE POSITIVE
• Prime Minister Narendra Modi is holding
meeting of several stakeholders on
December 29th to chalk out a `specific action
plan' to implement the `Make in India'
programme
• Finance Minister Arun Jaitley and
Commerce and Industry Minister Nirmala
Sitharaman would also address the
gathering
• Pharmaceuticals has been identified as a
key sector under the programme
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34. GOVERNMENT INITIATIVES &
SUPPORT REQUIRED
Challenges are many and will need to be tackled with
Government initiatives & support to reach our quality
affordable medicines to all without hindrance by:
 enhancing healthcare expenditure and infrastructure
 setting up a ‘Lifeline Sector Funding’ of about Rs. 12,000
crores for our Intermediates, APIs and Formulations
Industries
 establishing Pharma Growth Clusters
 logistical support for encouraging rural penetration
 upgrading infrastructure in manufacturing and research
 shifting focus from market capture to market creation
 encouraging greater Industry-Trade - Academia co-ordination
 Reducing dependency on China for APIs
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35. INFRASTRUCTURE
• Infrastructure - roads, ports, railways, power and
communication - basics for growth have been
critical bottlenecks
• Govt has initiated new smart cities and industrial
clusters, being developed in identified industrial
corridors having connectivity
• NIPERs to develop as training centres for SMEs
• Training programs need to be conducted, as also
mock audit drills, such as how to face a sudden
audit
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36. SKILL DEVELOPMENT & TRAINING
• Pharmacy colleges in India churn out thousands of graduates
in Pharmacy every year.
• Most of these fresh graduates are not sufficiently trained in
various functional disciplines such as Analytical, Quality
Management, Manufacturing etc to be really employable in
the Pharmaceutical Industry
• Dearth of human resources well versed with regulatory norms
e.g. filing NDA (New Drug Application), negotiation skills,
documentation, statistical techniques, etc.
• Regulatory requirements in pharma and biotech industries
found missing in pharmacy syllabus
• LSSSDC to provide pharma industry with a sustained stream
of skilled individuals across functional areas and levels,
thereby vastly reducing costs associated with re-skilling,
attrition and low productivity.
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37. BASIC TRAINING
• Training facilities should be accessible across
the country
• ‘Train the Trainers’ schemes
• Government to provide funds and incentives to
encourage organisations to welcome training
and trained candidates into their workforce
• SMEs will benefit by including Compulsory
training programme
• Government can also consider providing
infrastructure support by using venues like
schools after their working hours to be used as
training centres
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38. IN CONCLUSION
• We estimate that, within the next few years, the Indian
Pharma Industry with Government support will:
 Capture significant market-share of production Globally
 Create world class manufacturing facilities backed by
contemporary technologies and regulatory practices
 Raise the levels of employment to four times the
present level.
 Ensure that the poorest continue to have access to
affordable medicines
 Improve India’s global ranking from 3rd in volume and
14th in value to 2nd in volume and 8th in value
 Create for India a strong global brand image as a safe
efficacious cost-efficient supplier of quality pharmaceuticals
 IF IT IS PHARMACEUTICALS – IT IS INDIA
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39. Thank You
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