I was watching this wonderful interview with Amit Ranjan (link), here are the key points that I could gather. If anyone is interested in learning about Indian pharma septic practices I will recommend watching his videos.
- Injectable facilities can easily shift to US because it doesn’t require lots of space, is high value item, and also doesn’t require a bioequivalence study (which accounts for 1/3rd of an ANDA price). This can be a big issue for companies like aurobindo and Sun which have bet big on specialty injectables; Cadila hasn’t bet on injectables
- Oral solids will not move away from India because its labor intensive and is very low in the value chain (okay for companies like Ajanta, alembic, hetero)
- NCE : Cadila realized early that getting FDA approval is not easy (geopolitics and data integrity issues) and then marketing the drug is hard. So they started the process of getting approval from DCGI and then going to markets abroad which recognize drugs approval by DCGI. Wockhardt and Glenmark might need to realize this at some point
- API : Big ones won’t become giant unless they put up a lot of capacity (companies like Divis and Unichem); A lot of smaller companies will get business because entry into generic API is not at all difficult
- Fermentation based API : India cannot even compete with China because of low power costs in China (eg: vitamin, pencillin, gentamicin)
- CDMO : Indian companies didn’t get contracts for high margin drugs because of trust deficit. Only biocon through syngene could get that business because of Kiran’s trustworthiness from foreign clients. Now this could be a shift going forward and might benefit companies like Suven and Hikal (already working with innovators in agri division)
- Indian pharma story : Now big companies are focusing more on Indian pharma (eg: Dr. Reddy’s). Also Ayush bharat healthcare scheme was a game changer for Modi in the Hindi belt, so it’s possible that there will be pricing control in the next election season starting 2023-24. Be careful on pure play domestic pharma companies (because of increased competition and government price intervention) except companies working in critical products in terms of therapy like oncology, kidney replacement drug, blood treatment, etc. Other more acute therapies might have the branded option removed from them and only have the generic options.
- A lot of Indian companies like Shilpa medicare, Caplin point, Vivimed, etc. get one product approval from US FDA, never launch those proucts (so FDA never visits them) and because their plants are FDA approved, they get large business from other geographies such as Brazil, Africa, New Zealand, Australia, etc.
- India still has a large problem with maintaining sterile facilities because of poor hygiene practices. This is amplified by the contract workers employed at these facilities (account for 20-30% of workers). Employing contract worker for injectable facility is a criminal offense; this should be taken up by the FDA. Biocon moved their facility to Malaysia and realized later that even in Malaysia the hygienic practices are poor
Disclosure: Invested in a number of Indian pharma companies (Lupin, Cadila, Biocon, Ajanta, Natco), detailed portfolio here