March 8, 2018 

The next three to five years would see some key cardiovascular, diabetic and oncology molecules going off-patent in the Indian market. This could trigger launches of generic versions by local players and, thereby, a major drop in their prices. Experts expect the sharpest price drop in the oncology space. For the rest, pricing would depend on the number of players who get approvals after the patent expiry.

Overall, the prices of these molecules could drop by 20-25 per cent.

As such, only 5 per cent of the medicines used in India are patent-protected. In terms of market size, it is not big at the moment. However, some of the patented molecules like Apixaban (a Pfizer drug with the brand name Eliquis) has clocked a compound annual growth rate (CAGR) of 381.9 per cent over the past five years. According to data from the AWACS PharmaTrac, the market research wing of the All India Organisation of Chemists and Druggists that represents over 500,000 medicine sellers, the moving annual turnover (MAT) for the molecule as on January 2018 was Rs 620 million.

Then comes the case of anti-diabetic drug group Gliptins (nickname for a relatively new group of medicines used to treat Type-2 diabetes), which as a category are growing at 40 per cent. It is also one of the most competitive segments, with over 160 brands vying for a share of the Rs 100-billion anti-diabetes market in India. The diabetes segment clocked a 14 per cent growth rate in 2017, driven by new product launches.

At least four key Gliptins (Sitagliptin, Linagliptin, Vildagliptin and Saxagliptin) are expected to go off-patent within the next five years. They together represent a market size of Rs 7.3 billion in India. At present, these are sub-licensed to around 20 drug makers who co-market them under various brands.

Of these, Sitagliptin (a Merck Sharp and Dohme Corp drug) was launched in India around April 2008 and has clocked a 17.9 per cent CAGR over five years. Relatively younger molecule Linagliptin ( Boehringer Ingelheim drug) launched in June 2012 has clocked a 21.3 per cent CAGR. 

Thursday, March 29, 2018,

An inordinate delay in fixation of ad-hoc norms by Norms Committee in Director-General of Foreign Trade (DGFT) and its rectification has hampered fulfillment of export obligation of pharmaceutical exporters and caused financial constraints to them.

Exporters have to fulfill their obligation through exports for importing raw material free of duty under various schemes including Advance Authorisation. The ad-hoc norms are supposed to be fixed by Norms Committee in four months. If norms are not finalized within the stipulated time period, exporters have to pay customs duty and applicable interest on unfulfilled export obligation.

On the basis of orders received from buyers, exporters apply to advance licenses to clear material under Advance Authorisation Scheme. Exporters are submitting complete application in seven sets along with documents/technical details as per Appendix 4E to regional authorities and in turn regional authorities issue licenses and send all documents to Norms Committee, DGFT, New Delhi for fixation of norms. 

As per Appendix 4E, exporters need to furnish details of imported items for manufacture of export products.

There is an inordinate delay in fixation of ad-hoc norms by Norms Committee. Para 4.16(i) of Hand Book and Procedure (Vol.1 22 edition: 2015-20) reads as “Where norms are not finalized y Norms Committee in time limit for fixation of norms of four months from the date of receipt of complete application along with documents/technical details as per Appendix 4E, norms as applied for may be treated as final”. 

Currently fixation of norms takes about eight to ten months from the date of issue of authorisation. Whatever norms are ratified by Norms Committee are not as per the authorisations issued to the exporters. In many cases there are unintentional errors by authorities while issuing letters to the exporters. To rectify the same it again takes another eight to ten months' time. Delay in norms fixation and its rectification is also leading to increase in interest liabilities of exporters and also serious risk of exporters being included under Denied Entities List (DEL) by regional authorities for no fault of theirs.

Taking serious note of this, industry body Indian Drug Manufacturers' Association (IDMA) had called on DGFT Alok Vardhan Chaturvedi drawing his attention to the issue. 

IDMA in its representation to DGFT said “Several member-exporters have informed us that their norms are not ratified within the time limit. If norms are not finalized within the stipulated time period, exporters have to pay customs duty and applicable interest on unfulfilled export obligation. Since norms are not fixed by the authorities in time as per Foreign Trade Policy 2015-20, the exporter should not be penalised and at the same time, the concerned authorities may be directed to justify delay in fixing norms within stipulated timelines.”

DRC, the largest country in sub-Saharan Africa has released a list of 35 pharmaceutical products that can be manufactured by the local pharmaceutical industry in the country. The list includes amoxicillin, chloramphenicol, ciprofloxacin, cotrimoxazole, cyproheptadine, doxycycline, erythromycin, mebendazole, metronidazole, meprobamate, multivitamin tablets, vitamin B1, B6, B12, vitamin C syrup, paracetamol, phenoxymethylpenicillin, promethazine, tetracycline, etc.  

The country has banned import of these drugs with immediate effect thus putting Indian pharma MSMEs which have a significant exposure to it in a fix.

India and DRC signed an agreement on mutual promotion and protection of investments on April 13, 2010. A large portion of DRC’s pharmaceutical imports is sourced from India, some for re-export to neighboring countries like Republic of Congo, Gabon and the Central African Republic. On the other hand, in a bid to promote domestic production of drugs, the National Agency for Food and Drug Administration and Control (NAFDAC), Nigeria has also come out with a ceiling list of 36 pharmaceutical products which can not be registered by the foreign drugmakers in the country.

The list comprises ampicillin, indomethacin, tetracycline, sulphadoxine, ibuprofen, alcohol based hand sanitizer, piperaquine, paracetamol, albendazole, mebendazole, pseudoephedrine+paracetamol+caffeine FDC, piroxicam, diazepam, amlodipine, chlorpheniramine maleate, ciprofloxacin, cimetidine, vitamine C, amoxicillin, topical penicillin, erythromycin, salbutamol, metformin, griseofulvin, bisacodyl etc.

In Nigeria, regulations allow local drug manufacturers to also be drug importers. Many of the leading local drug manufacturers are also representatives of global drug originators, and hence have a strong incentive to invest in local drug registration and the introduction of lucrative new products. Very few markets in Africa are as potentially lucrative as Nigeria. 

MSMEs are facing a double whammy of skyrocketing prices of raw materials and losing foreign markets

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