Access, Affordability and Quality
The three key pillars
Pharmaceutical success, for individual companies as well as the industry in aggregate, rests on three pillars: access, affordability, and quality. While all are necessary, organizations can carve out a competitive edge for themselves by finding a blend that suits their unique capabilities and strategic vision. Even in a crowded landscape, no two companies are identical, and it is this diversity in approach that makes India’s life sciences sector so vibrant and resilient.
The origins of affordable Indian pharmaceuticals
At a time when medicines were mostly imported to India, the country faced some of the highest drug prices in the world. Access to modern medical care was a luxury only the wealthy enjoyed. It was amid this environment that the Patents Act of 1970, which essentially abolished product patents for pharmaceutical ingredients in India, sparked a flourish of activity. Coming into force in 1972, the goal of the legislation was to guarantee low-cost access to medication while simultaneously fostering the development of domestic industry over a purely import market. As a result, the number of pharmaceutical companies domiciled in India more than doubled from 1970 to 1980, and most of these companies focused on reverse engineering innovative products that had been previously introduced to the market. As the industry honed its reverse engineering capabilities, the duration between an original drug’s introduction and the Indian generic’s equivalent shortened. Thus, an industry was born whose express purpose was to provide access to affordable medication, and the emphasis was placed on improving and expanding reverse engineering capabilities rather than focusing outright on R&D.
This had a profound impact on who could receive medical treatment. “India's global impact as a supplier of affordable quality medicine is profound,” remarked Viranchi Shah, director of Saga Lifesciences and national president of the IDMA. “In the late 1980s and early 1990s, many Indian companies were critical in supplying HIV drugs to Africa because they were able to bring down the costs of these treatments. Since then, India has been the most important source of affordable quality medications to the developing world.”
When the WTO’s TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) came into effect in 1995, many within India’s pharmaceutical industry feared it portended the death of the sector. The multilateral agreement on intellectual property, which remains the most comprehensive of its nature to date, provided a more rigid view on the adherence to patents. “Everybody thought the Indian pharma industry would die. On the contrary, because Indian companies were trained in the field of innovation and patenting, the growth after 1995 has been tremendous,” said Gopakumar Nair, managing director and owner of the intellectual property consultancy and legal advisory firm Gopakumar Nair Associates (GNAs). “After WTO was introduced, through learning the tricks of the trade of the new regime, India is now filled with masters of IP and continues to innovate and bring new developments to market.”
As Indian companies started to invest more into R&D, the number of new drug compounds coming out of the country increased. All the while, the generics industry maintained its momentum. Today, India’s pharmaceutical sector is renowned for its innovations in healthcare that offer affordable solutions to patients.
“Regulatory standards and the associated costs are very dependent on the market you are looking to serve. If I want to sell something in India, I must meet a specific set of requirements that are different than if I want to sell the same product in the US or any developed country.”
Chetankumar Domadia, Marketing Director, Gujarat Pharma Lab
Setting the record on quality
While India is commended for its work manufacturing and distributing affordable medicines to the global population, there remains a disconnect between public perception of the quality of these drugs and the standards that most Indian drug makers are upholding.
To an extent, this may because India was too successful at revolutionizing the accessibility of low-cost medicine. Rather than seeing the delicate dance at play between affordability and quality, many are quick to assume that one must be sacrificed in order for the other to thrive.
Gambir Chordia, director of Medopharm, is insistent that this is not the case. “It is a myth that quality medicines have to cost more,” he said. “Economies of scale and consistent production with skilled manpower and high productivity can ensure that process loss can be minimized through following quality standards and practices. Thereby, generic medicines can be cost effective and of high quality.”
That said, the industry is not exempt from scandals over drug quality that reach a worldwide audience. In mid-October 2022, Maiden Pharmaceuticals made headlines in its linkage with the deaths of 66 children in The Gambia. The company claimed its image was hastily tarnished by the media without clear evidence that its cough syrups were responsible for the incident. Irrespective of whether the blame was deserved, Aligns International CEO Rajiv Maniyar believes the story to be a case of strategic media bias. “Five years ago, statistics showed that China and India were supplying 80% of the world’s medicines in terms of volumes,” Maniyar said. “These medicines are sold at affordable prices, and because big multinationals then have to lower their prices, they try to tarnish the Indian image by grabbing at any straws to state their claims that India has inferior quality products.”
“If you are delivering a high value product and receiving a good price, there is no reason to bypass the system and the procedures required for quality.”
Maulik Sudani, Executive Director, Farbe Firma
He sees the headlines connecting the deaths in The Gambia with the Delhi-based cough syrup manufacturer as publicity that sullies the reputation of many Indian companies that consistently do the right thing and adhere to the highest quality standards without receiving any level of heightened recognition.
While there is no proof that MNCs are launching a premeditated media assault against Indian-based pharmaceutical companies, Maniyar’s assertion that many domestic manufacturers uphold stringent quality standards is an inarguable fact. As testament to the volume of companies upholding the measures outlined by rigorous regulatory frameworks, the country is home to the highest number of US-FDA approved plants outside the United States.
Dr. Hemant Koshia, commissioner of the FDCA in Gujarat, explained the approach he takes to ensure that pharmaceutical companies operating within his state are appropriately qualified to create drugs that will ultimately be consumed by patients: “In order to get a license to drive a vehicle, one must first pass a driving test. Here, I am giving a license to manufacture a medicine, which is far more consequential than a driver’s license.”
For this reason, Dr. Koshia makes a point to personally interact with the executive leadership of Gujarati pharma companies to confirm their motives are in accordance with the sector’s mission to provide safe and effective treatments to patients.
“It is a myth that quality medicines have to cost more. Economies of scale and consistent production with skilled manpower and high productivity can ensure that process loss can be minimized through following quality standards and practices.”
Gambir Chordia, Director, Medopharm
Logistical issues remain
While India has taken strides to provide affordable, quality medicines to the global population, the country still has work to do in improving access to healthcare at home. The unfortunate reality is that medical coverage within India remains strained not due to inhibitory costs but because of the difficulty in reaching much of the population.
Complications during Covid-19 revealed the importance of supply chain resilience, but within India, the problem has more to do with creating distribution channels rather than fortifying them. “Indian distribution networks are very fragmented because people make purchases from local mom-and-pop shops scattered throughout the country,” explained Sahil Dharia, CEO and founder of Soothe Healthcare, a manufacturer of personal hygiene products including fem hygiene, baby diapers, and adult diapers.
As his products deal with a taboo topic in India – female reproductive organs – his company faced the dual barrier of a lack of awareness. According to Dharia, this challenge is being solved rapidly by the internet, which is standing in for conversations that parents and teachers feel uncomfortable having with girls and young women. “If one girl in a class goes online and decides to use a sanitary pad, her peers will follow. Market penetration is all about awareness, which is being accelerated through technology.”
While the internet may play a role in tapping into a broader swath of the populous, it cannot overcome India’s fundamental shortcoming. “Logistics is a major challenge in India, as transport from one side of the country to the other can take a long time,” said Rajendra Shah, director of Mercury Laboratories.
To mitigate the challenge, Mercury established a system of depots with available stock throughout the country, ensuring the company can get medicines to patients within 24 to 48 hours. Shah acknowledged the work the Government of India is doing to invest in providing a comprehensive range of affordable healthcare services to a broader spectrum of its country’s population. According to Shah, the public health insurance fund program known as Ayushman Bharat will not only provide healthcare to millions of people otherwise unable to afford it, but it will also create 150,000 government-supported ‘health and wellness centers’ that will provide a variety of healthcare services.
“Our franchise model saves money for consumers because we can directly promote our products through channel partners to doctors. This cuts out costs in manpower and travel-related expenses. Additionally, through this system we can overcome communication issues from language barriers with local doctors in different regions of the country.”
Anchit Agrawal, Managing Director, Ambit Bio Medix
Long-standing logistical issues have been compounded in recent years by higher than normal transportation costs, which impacts transport within India as well as the shipment of products overseas. “Freight prices went up during Covid-19 and mostly have not yet reduced,” commented Chetankumar Domadia, managing director of Gujarat Pharma Lab. “When you are dealing with the export of an inexpensive product, as air freight costs rise, they can become higher than the total cost of the goods. This is an issue we are grappling with today.”
Moving forward, the Indian government should continue to make overcoming such obstacles a priority, providing more robust and expansive distribution networks to insulate against high cost volatility and ensure better national healthcare coverage.
Image courtesy of Deposit Photos