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Options for Indian Pharmaceutical Industry in the Changing Environment

Options for Indian Pharmaceutical Industry in the Changing Environment

With the shift to a strong patent law, Indian pharmaceutical companies are rapidly shifting their focus to the generics market of the developed world. But even as India has become a net exporter of pharmaceuticals, import dependence on active pharmaceutical ingredients has steadily increased over the last 10 years. As far as the Indian affiliates of the multinational pharmaceutical companies are concerned, their shares of both the active pharmaceutical ingredients and formulations are declining and their "investment" preferences have shifted towards financial securities. A process of consolidation through mergers and acquisitions has been underway, which apart from increasing market concentration, has been a key element of firm strategy to tap business opportunities along the value chain in the domestic as well as the overseas markets. In the field of R&D, with no Indian pharmaceutical company being equipped to take a potential drug from the investigational stage to the stage of final market launch, collaboration with multinational corporations is the norm, resulting in biases in the choice of therapeutic areas towards lifestyle-related diseases.

Options for Indian Pharmaceutical Industry in the Changing Environment

With the shift to a strong patent law, Indian pharmaceutical companies are rapidly shifting their focus to the generics market of the developed world. But even as India has become a net exporter of pharmaceuticals, import dependence on active pharmaceutical ingredients has steadily increased over the last 10 years. As far as the Indian affiliates of the multinational pharmaceutical companies are concerned, their shares of both the active pharmaceutical ingredients and formulations are declining and their “investment” preferences have shifted towards financial securities. A process of consolidation through mergers and acquisitions has been underway, which apart from increasing market concentration, has been a key element of firm strategy to tap business opportunities along the value chain in the domestic as well as the overseas markets. In the field of R&D, with no Indian pharmaceutical company being equipped to take a potential drug from the investigational stage to the stage of final market launch, collaboration with multinational corporations is the norm, resulting in biases in the choice of therapeutic areas towards lifestyle-related diseases.

RAVINDER JHA

F
or more than three decades, India recognised only process patents in order to encourage the domestic pharmaceutical industry through the Indian Patents Act (IPA) 1970. Till 1970 the Indian pharmaceutical market was controlled by multinational corporations, which hardly undertook any bulk drug production (manufacturing) and largely imported bulk drugs to process them into formulations. With the adoption of IPA 1970 and the Foreign Exchange Regulation Act (FERA), 1973, Indian Drug Policy (1978 and 1986) and the Drugs Price Control Order (DPCO), the domestic firms advanced in terms of their market share and manufacturing capability and were able to provide access to medicines at affordable prices for the middle class.

From the mid-1980s, the developed nations, led by the US, started pushing the issue of intellectual property rights (IPRs) as a part of the Uruguay round of multilateral trade negotiations. In 1988 Congress passed the Omnibus Trade and Competitveness Act which authorised the US government to take retaliatory action against countries which did not provide protection to intellectual property rights. All the members of General Agreement on Tariffs and Trade (GATT) ultimately had to amend their laws and recognise product patents. The conflicts over patent policies have been resolved more through bargaining power than equity considerations

In India the IPA 1970 has been amended thrice since India committed to the World Trade Organisation (WTO) to honour the agreement signed in 1995 to comply with the relevant clauses under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) by January 2005.The first amendment to IPA 1970 was in 1999 which introduced mailbox provisions to receive product patent applications; exclusive marketing rights (EMRs) were made retrospective from January 1, 1995. The second amendment in 2002 extended the term of patent to 20 years, imposed the burden of proof on the infringer as opposed to the patent holder, along with changes in the stipulations governing compulsory licensing. The last amendment in 2005 finally recognised product patents as well.

This paper attempts to recognise and focus on the factors that are influencing the structure and growth of the Indian pharmaceutical industry in the new scenario and how some large domestic and multinational companies are preparing themselves to compete and survive. We focus on the different strategies adopted by the top 15 companies since 1995 with respect to their export orientation, import dependence, investment, option of manufacturing versus marketing (i e, bulk drugs versus formulations) and stimulus to research and development. Section I discusses the transformation of Indian pharmaceutical industry since 1970 in brief. Section II covers various policy measures and initiatives responsible for the growth of the industry. Section III discusses the changing strategies of big firms in consolidating their businesses to face the tighter patent regime. This study covers 15 large firms in terms of net sales, including a few MNCs. The sample contributes as much as 64 per cent of the total bulk drug production in the country. The main source of data are the annual reports of these companies, the Indian Drug Manu factu rers’ Association (IDMA) databank, the Organisation of Pharmaceutical Producers of India (OPPI) Pharmaceutical Compendium, the Bulk Drug Manufacturers’ Association (BDMA) reports, and the Directorate General of Commercial Intelligence and Statistics (DGCIS) export import data. Section IV concludes the study.

I Transformation of the Indian Pharmaceutical Industry

The Indian pharmaceutical industry is one of the largest among the developing countries. It contributes 8 per cent in volume terms but only 1 per cent in value terms to global pharmaceutical sales. India’s small share in value terms is attributable to the relatively lower prices of drugs in the country. Its strength lies in manufacturing generics, i e, off-patented drugs and its major exports belong to the anti-infectives segment. Since India did not recognise product patents, it is also a major supplier of generic versions of patented drugs, especially life-saving drugs for HIV-AIDS to less developed countries like South Africa at affordable prices. In 2006, products with sales in excess of $18 billion lost their patent protection in seven key markets (US, Canada, France, Spain, Italy, Germany and the UK). The US represents more than $14 billion of these sales.1 Generics represented more than half of the volume of pharmaceutical products sold in these seven key markets. With lower-cost therapies replacing branded products in classes such as lipid regulators, anti-depressants, platelet aggre gation inhibitors and respiratory agents, generics are assuming a more central role2 and India is slated to be a major beneficiary of this change. According to IMS Health report, India was one of the fastest growing markets in 2006, with pharmaceutical sales increasing 17.5 per cent to $ 7.3 billion.

The total production of the Indian pharmaceutical industry is estimated at Rs 440 billion in FY 2006 (IDMA estimates) with exports amounting to Rs 215 billion. According to the OPPI, the Indian pharmaceutical industry consists of around 11,000 units. However, a recent report by the government of India [Expert Committee 2003] puts the total number of manufacturing units at 5,877, out of which 300 units contribute much of the total domestic market. The rest of the units are very small players that are engaged in the manufacturing of formulations – an activity that requires very low investment in plant and machinery and is less technology intensive.

The process of drug manufacture basically has two components, namely, bulk drug production and formulation production. Bulk drug production involves the production of the active ingredients present in the drug, called the Active Pharmaceutical Ingredient (API). Formulation production involves the processing of bulk drugs into finished dosage forms such as tablets, capsules, injections, ointments, etc. Before the Indian Patents Act (1970) came into force, the multinational corporations controlled the supply of bulk drugs, which impeded the growth of local manufacture under the 1911 Indian Patents and Designs Act, the total investment (at current prices) in the pharmaceutical sector was just Rs 24 crore in 1952 [Hathi Committee Report 1975]; which rose to Rs 200 crore in 1972, the year the Patents Act of 1970 came into force. More recently, total investment is Rs 5,253 crore (estimated) in 2003-04 (BDMA report).

The Indian pharmaceutical industry manufactures close to 500 bulk drugs belonging to several therapeutic segments like antiinfective, pain management, cardiovascular (CVS), central nervous system (CNS) and anti-diabetics. Although formulations account for a large share of the overall pharmaceutical production in value terms, the proportionate share of bulk drugs has been increasing since the mid-1990s. India’s strong base in the chemical industry facilitated the development of bulk drug manufacture. Also reverse engineering and cost competitiveness contributed to the rising share of bulk drugs. The compound annual rate of growth of production of bulk drugs from 1991 to 2005 was 8.4 per cent while that of formulations was 4.9 per cent over the same period (Table 1). The period-wise compound annual growth rates reveal that both bulk drugs and formulations production were growing at similar rates from 1980-81 to 1994-95 but the growth rate of production of bulk drugs almost doubled after 1995. Bulk drugs production has been growing almost twice as fast as formulation production during 1995-96 to 2004-05.

The production of bulk drugs is primarily based on technology related to chemicals, from phytochemicals (based on plants) to identifiably highly complex chemical substances like antibiotics, hormones, etc. Initially India imported technologies for the production of important antibiotics and a number of bulk synthetic drugs, but over time it has refined these technologies by indigenous efforts, for better economy of production.

II Law and Public Policy

In order to trace the evolution of Indian pharmaceutical industry in the last 35 years, let us look at the major legislations passed by the government since 1970. With the objective of controlling prices of important drugs and making them available to the consumer, the government introduced the Drug Price Control Order (DPCO) in 1970. It specified the maximum selling price of bulk drugs and formulations and the turnover ceilings for exemption from the DPCO. The government also enacted the Indian Patents Act (IPA), 1970, to provide legal recognition to process patents for food, medicine and chemical substances. Prior to the coming into force of the Patents Act of 1970, the multinationals played an important role in the industry. They brought in technology and international manufacturing practices and dominated the dome stic market. But with these two policy initiatives and with the FERA, where multinationals were directed to bring down the proportion of equity capital held by them, Indian companies could drive a cost advantage vis-à-vis their international counterparts. Gradually Indian companies developed their own production and marketing skills and overtook the MNCs in the Indian market.

The ability of the Indian manufacturers in chemical synthesis and reverse engineering has given them an edge in terms of cost competitiveness and established the quality of their bulk drugs among developed country regulatory authorities like the

Table 1: Compound Annual Growth Rates of Production in the Pharmaceutical Industry (1980-81 to 2004-05)

(Per cent)

Bulk Drugs Formulations

1980-81 to 1989-90# 5.0 5.5 1991-92 to 1994-95$ 7.6 7.25 1995-96 to 2004-05$ 10.2 5.5 1991-92 to 2004-05$ 8.4 4.9

Notes: # Calculated at 1980-81 base year prices of drugs and medicines. $ Calculated at 1993-94 base year prices of drugs and medicines.

Source: Bulk Drug Manufacturers’ Association, Bulk Drug Industry At a Glance, various issues.

Table 2: Proportions of Bulk Drugs and Formulations in Pharmaceutical Production, Exports and Imports

1985-86 1990-91 2003-04*
Production of bulk drugs 0.18 0.16 0.22
Production of formulations 0.82 0.84 0.78
Imports of bulk drugs 0.93 0.79 0.70
Imports of formulations 0.07 0.21 0.30
Exports of bulk drugs 0.24 0.53 0.45
Exports of formulations 0.76 0.47 0.55
Note: * Estimated.
Source: BDMA.

United States Food and Drugs Administration (USFDA) and the United Kingdom Medicines and Healthcare Products Regulatory Agency (UKMHRA). This has resulted in India being a net exporter of pharmaceuticals to both developed and developing countries.3 The share of bulk drugs in total pharmaceutical exports has almost doubled from 1985-86 to 2003-04 (Table 2). In 1985-86 out of total pharmaceutical exports, the share of bulk drugs was 24 per cent. This share increased to 53 per cent in 1990-91 as patents on many drugs expired in the late 1980s and several companies started filing drug master files4 to get approvals for their manufacturing facilities in the US and other international markets. While the share of bulk drugs has risen in exports, there is a fall in its share in total pharmaceutical imports. Imports are largely sourced from the European Union (60 per cent) followed by north America (16 per cent) and the Asia Pacific and Latin America (with 5 per cent each) (Source: UN COMTRADE Statistics). The share of bulk drug imports in total pharmaceutical imports fell from 93 per cent in 1985-86 to 70 per cent in 2003-04. However, with declining import duties, the import component in domestic consumption of bulk drugs has gone up.

If one looks at the import penetration ratio, the dependence on imports of bulk drugs for domestic consumption has increased with reduced import duties. The import penetration ratio, defined as the import-apparent consumption ratio, for bulk drugs is as high as 70 per cent, risen from 50 per cent in 1990-91, while the formulations imports in total apparent consumption is around 6 per cent (Table 3).

Let us now turn to the sample study of 15 large manufacturers in the Indian drugs industry to assess the comparative trends in domestic firms and multinational corporations.

III Evidence for Large Domestic and Foreign Enterprises

Trends in Bulk Drugs Manufacturing

The sample (under study) of the 15 companies (listed in Table 4), including nine domestic firms, contributed as much as 64 per cent of total bulk drugs production for the year 2004. Some of the large domestic formulations manufacturers have inte grated backwards to consolidate their business and improve their profitability. They have gone in for bulk drugs manufacturing. The domestic firms in our sample contributed 41 per cent of the total bulk drugs production in 1995 which increased to 59 per cent in 2000 and further to 62 per cent in 2004. India is the largest recipient of US FDA approvals for manufacturing bulk drugs outside the US.

For the sample firms under study, the contribution of MNCs in total national bulk production was quite low and it is going down further. It has gone down from 10 per cent in 1995 to only 2 per cent in 2004 (Table 4). However, they are big players in the formulations market. Even in their own product portfolio, bulk drugs form a very small proportion as against their domestic counterparts.

As mentioned earlier, the domestic companies have developed due to their competence in reverse engineering. The number of bulk drugs produced by big domestic companies like Ranbaxy, Dr Reddy’s, Cipla, Lupin and Aurobindo has increased. While some of the big firms are shifting towards formulations, companies like Lupin, Sun and Aurobindo are investing substantial amounts in bulk drugs (Table 5). Lupin derives 54 per cent of its turnover through bulk drugs sales and Sun has 31 per cent of its turnover coming from bulk drugs while it was only 1 per cent in 1995. Aurobindo has 90 per cent of its revenue from bulk drugs.

Trends in Formulations Production

Formulations were the major preoccupation of the MNCs earlier also; they did very little bulk drug manufacture. With the abolition of the bulk drugs-formulation ratio imposed on the MNCs in 1994, they have had no incentive to build capacity in bulk drugs. Though their main focus is on formulations, in the

Table 3: Import Penetration Ratio

(Rs million)

Year Production Exports Imports M/(P+M-X)
Bulk Drugs
1990-91 7,300 4,134 3,226 0.505
1995-96 18,220 11,329 16,300 0.703
2000-01 45,330 37,200 22,650 0.736
2003-04 77,290 64,810 28,130 0.693
Formulations
!990-91 38,400 3,714 849 0.024
1995-96 91,250 20,448 2,700 0.037
2000-01 1,83,540 45,020 7,150 0.049
2003-04 2,76,920 78,432 12,040 0.057

Source: BDMA.

Table 4: Total Value of Output and Share of Bulk Drug Production by Ownership Clusters

(Rs million)

Company 1995 2000 2004 2005
Ranbaxy 3,779 6,671 9,536 10,709
Dr Reddy’s 996 1,513 7,690 6,906
Wockhardt 1,222 1,680 1,860
Lupin 99 2,580 6,391 6,684
Cadila 628 1,872 1,730
Sun 6 1,699 2,819 3,171
Nicholas Piramal 3 19 1,184 1,359
Aurobindo 825 6,650 12,905 10,396
Cipla 493 1,241 4,067 3,487
Share of sample domestic cos
in total production (per cent) 41 59 62 51
E Merck 175 187 170 172
Astra Zeneca Pharma 51 10 13 10
Glaxosmithkline 1,142 1,286 1,126 1,039
Novartis 0 82 393 380
Pfizer 44 35 10 0
Aventis 59 74 146 271
Share of sample MNCs in total
production (per cent) 10 4 2 2

Notes: (1) Though the firms’ figures are actual figures from the annual reports, total production is an estimated number for 2005.

  • (2) The data on bulk drugs production is provided in the notes to the financial statement of the annual reports of the companies. For instance, Ranbaxy’s Annual Report 2004, Schedule 26, No 23 has data on sales, opening stock and closing stock of finished goods, bulk as well as formulations, for 2004 and 2003 on page 125.The share was calculated as a ratio of the sum of the 15 sample firms’ bulk drugs production to the total bulk drugs production as provided by BDMA.
  • (3) Cadila Health came into its present form in 1995 following a split between the promoters of the erstwhile Cadila Laboratories.
  • (4) Wockhardt, in its present form, was incorporated in 1999. Source: Annual Reports.

    last 10 years, even here, their share in total production has gone down. In the sample of 15 companies, the contribution of the foreign subsidiaries in formulations has gone down from 62 per cent to 28 per cent in the last 10 years (Table 6). This is not so much because they are manufacturing less; domestic companies have increased their production almost five times in the last 10 years.

    Implications for Imports and Exports

    Multinational companies import either bulk drugs or some life saving, new generation, under patent formulations from their parent companies, to India. The share of bulk drugs and finished goods in total imports is consistently increasing for MNCs. Since 1994 when the ratio requirement for bulk drugs-formulations was abolished, many foreign companies closed down their bulk drugs manufacturing plants in India. GSK closed its manufacturing unit for Ranitidine in Surat which was a base for providing the drug not only in India but also to its subsidiaries. The MNCs are engaging in simply importing rather than undertaking investment or subcontracting the production of bulk drugs in the country. For instance, in 2004, Pfizer exported finished goods and bulk materials to its other subsidiaries worth Rs 286 lakh, where as it imported into India other finished goods worth Rs 1,574 lakh (Annual Report, 2004). It has also ceased its operations in Ankleshwar, Hyderabad and Chandigarh plants and is relying on small-scale units for its requirements. Similarly, GSK is increasingly relying on imports: in 2004, it imported materials from its subsidiaries in UK and Belgium worth Rs 7,300 lakh but sold to its subsidiaries finished goods and materials only worth Rs 1,200 lakh. The share of bulk drugs and finished goods in total imports has been consistently rising for MNCs. In 2005, 94 per cent of Novartis’ total imports comprised of goods for resale (Table 7). Also apart from relying on third party under loan licensing for its total production,5 47 per cent of its turnover came from purchases from other manufacturers in 2006. These purchases, which are over and above the orders under loan licensing, form roughly 10 per cent of the total sales for domestic companies but average around 30 per cent for MNCs (based on calculations from the annual reports of domestic companies and MNCs for the year 2005). The trends in import dependence for bulk drugs are similar for some domestic firms like Nicholas Piramal, as shown in Table 7.

    The domestic companies including Nicholas Piramal (NPIL) and Cadila and now Ranbaxy have increased their bulk drugs imports in total imports. NPIL has entered into a licensing agreement with Biogen Idec, USA for marketing the latter’s products in India. Similarly, Ranbaxy has formalised two out-licensing deals with a French company, Ethypharm to supply two of the latter’s drugs (one painkiller and a drug to control cholesterol levels) to the Indian market. In an earlier study [Subramanian and Pillai 1979], it was observed that the import intensity (average) in raw material consumption was higher among foreign controlled companies (16.2 per cent) and it was lowest among Indian firms with no or very low foreign association (5.12 per cent). But now, MNCs, rather than producing the bulk drugs and relying on imported raw material, import finished goods. In fact it is the domestic companies that are making bulk drugs and hence go for cheaper raw materials by importing them. In our sample, one observes that import intensity in raw material consumption of domestic firms is higher than that for MNCs (Chart 1).The multinational companies are focusing more on finished goods from their parent or subsidiaries rather than manufacturing bulk drugs – hence their raw material requirements are limited compared to Indian firms which are still manufacturing a major part of their bulk drug requirements. With import liberalisation, the domestic companies’ import content is going up.

    The fear that the domestic market will be gradually controlled by MNCs as they bring their patented drugs is forcing domestic firms to export and to set up affiliates abroad. This is the main reason why big companies like Ranbaxy, Dr Reddy’s and Cipla have started raising revenues through exports in the last 10 years in the huge off-patent global drugs market. The generics market offers immense opportunities to developing countries where cheap labour and low material cost give them an absolute cost advantage. India can test, develop, manufacture and market a generic medicine at a cost which is 20-40 per cent of what it

    Table 5: Firm Level Bulk Drugs Share in Total Production

    (Per cent)

    Firm 1995 2000 2004 2005

    Ranbaxy 52 38 26 30 Dr Reddy’s 49 31 50 45 Wockhardt 21 19 18 Lupin 16 47 54 54 Cadila 13 17 15 Sun 1 35 31 31 Nicholas Piramal 0 0 9 11 Aurobindo 96 91 95 91 Cipla 14 16 21 15 Merck 12 9 7 7 Novartis 0 2 10 10 Pfizer 2 2 0 0 Astra Zeneca Pharma 11 1 1 0 GSK 12 13 8 7 Aventis 2 2 2 3

    Source: Annual Reports.

    Table 6: Firm Level Formulation Production

    (Rs million)

    Firm 1995 2000 2004 2005

    Ranbaxy 3,491 10,862 26,773 24,893 Dr Reddy’s 1,028 3,295 7,784 8,296 Wockhardt 4,488 7,043 8,662 Lupin 515 2,939 5,429 5,639 Cadila 4,129 9,288 9,617 Sun 662 3,146 6,168 7,185 Nicholas Piramal 946 4,945 11,631 11,491 Aurobindo 36 694 750 1,070 Cipla 2,946 6,646 15,391 20,267 Sample Domestic Cos 9,624 41,144 90,257 97,120 Merck 1,312 1,838 2,240 2,420 Novartis 1,288 3,268 3,672 3,604 Pfizer 1,900 2,148 5,110 5,730 Astra Zeneca Pharma 421 958 1,782 2,323 GSK 8,051 8,310 13,849 14,706 Sample MNCs 15,872 20,604 34,428 37,206 SampleTotal 25,496 61,748 1,24,685 1,34,326 Industry total 79,350 1,59,600 2,79,140 3,19,460* Sample share 32.1 38.7 44.7 42.0 MNCs share in sample 62.2 33.4 27.6 27.7 Domestic share 37.7 66.6 72.4 72.3

    Notes: The share was calculated as a ratio of the sum of the 15 sample firms’ formulations production to the total formulations production as provided by BDMA.

    * Estimated. Source: Annual Reports.

    costs to make the identical drug in the west [Lanj0ouw 1998]. The Indian pharmaceutical industry, with its strong reverse engineering and chemistry skills and relatively low cost structure, is ideally placed to tap the generics market. Already quite a few Indian companies have filed Drug Master Files (DMFs). Apart from this, some companies have obtained approvals on their abbreviated new drug applications (ANDAs), which seek approval to market formulations. In fact, Indian companies (taken together) have the maximum number of USFDA approvals among foreign generic pharma companies.

    The focus on the US generic market is apparent through the surge in the number of companies which have now received USFDA approvals. Among these firms only Ranbaxy, Dr Reddy’s, Wockhardt and Cipla had USFDA approvals in 1993 (BDMA’s Industry At a Glance 1995). But now, almost 40 domestic firms have USFDA approvals for exports and manufacturing facilities. Export markets are being served directly by setting up their own subsidiaries (e g, Ranbaxy and Dr Reddy’s) or by entering into marketing collaborations with local firms abroad to have easy access to the foreign market. Cipla has gone for this channel instead of applying for ANDAs. Nicholas Piramal has opted for a model which is collaborative/partnership in nature with MNCs. It is entering into long-term custom manufacturing agreements with inno vator MNCs. It has entered into one such agreement with Astra Zeneca, one with a global hospital products company, and a contract manufacturing related R&D service with Pfizer International.

    Ranbaxy Laboratories is deriving 63 per cent of its sales from exports and others like Dr Reddy’s, Aurobindo, Cipla and Lupin are deriving roughly 50 per cent or more of their earnings from exports as against 0.3 per cent by Pfizer and 1.8 per cent by GSK. The focus of domestic companies is shifting to the regulated markets of the US and Europe where the generic segment has thrown up immense opportunities. However, while the realisations and profitability are good in generics in the regulated markets, the earnings are volatile. This is so because profits tend to decline after the initial product launch phase and multiple generic players enter the market.

    Besides, launch of authorised generics6 is another development that seeks to reduce the attractiveness of the generics business. When a generic player wins a patent challenge, the innovator may allow/authorise another generic player to launch its own copy, known as authorised generic. The innovator supplies the drug thereby making the market unattractive for the generic

    Table 7: Share of Bulk Drugs Imports in Total Imports Chart 1: Import Intensity in Raw Material Consumption

    Firm 1995 2000 2004 2005
    Domestic
    Ranbaxy 0.11 .21
    Dr Reddy’s 0.09 0.15 0
    Wockhardt 0
    Lupin 0.03 0
    Cadila 0.44 0.23 .14
    Sun 0.10 0.21 0
    Nicholas Piramal .04 0.85 0.54 .44
    Aurobindo 0
    Cipla 0
    MNC
    Merck 0.44 0.54 0.66 .63
    Novartis 0.38 0.57 0.99 .94
    Pfizer .04 0.44 0.25 .16
    Aventis 0.30 0.26 .28
    GSK .02 0.15 0.49 .47

    18

    16

    14

    12

    10

    8

    6

    4

    2

    0

    Dom

    MNCs

    Source: Calculated from the annual reports of the sample firms.

    player who won the challenge as the competition intensifies and the six-month exclusivity is not granted. In 2005, Ranbaxy suffered a major setback on its sales and profits on account of sharp price erosion in the US generic market. Not only did the profit after tax declined from 13 per cent as a proportion of its consolidated sales in 2004 to a mere 5 per cent in 2005,the gross sales actually declined in absolute terms from Rs 36.14 billion to Rs 35.36 billion. The sales in the US were lower by 25 per cent at $ 328 million (Annual Report 2005, p 22). Similarly, Dr Reddy’s sales to the US declined in 2004-05 and the loss could not be made up by sales to European countries; the consolidated sales dropped by 3 per cent in one year. The German government has passed the Economic Optimisation of the Pharma ceutical Case Act, effective from May 2006, which tries to contain the cost increase in the area of pharmaceuticals and thus the advantage of higher prices cannot be enjoyed as before. All these factors are going to hinder the flow of export revenues for the large pharmaceutical companies of India.

    Market Concentration

    As the Indian pharmaceutical industry faces a stricter patent regime, the capital requirements to undertake research are forcing many firms to go for mergers and acquisitions. Apart from this, many companies are consolidating their business by acquiring the manufacturing facilities/brands of other firms. MNCs are also consolidating their business through mergers, though they have not yet started acquiring local companies. This trend of acquiring local firms was observed in other developing countries like Argentina, Mexico and Brazil, where on recognising product patents, consolidation of the industry through mergers and acquisitions picked up [Maskus 2000]. In Argentina, after the enactment of a new patent law in 1995, MNCs like Bristol Myers Squibb, Novartis, Smithkline Beecham, Ivax Corporation and Merck have acquired many local companies’ stakes. Table 8 shows some mergers and acquisitions in the Indian pharma ceutical industry.

    Apart from these mergers, some Indian companies have acquired company brands and stakes in some companies

    1995 2000 2005

    Chart 2: Total Number of USFDA Approvals (by August 2006)

    0 10 20 30 40 50 60 70 ANDAs DMFs

    Ranbaxy

    Dr.Reddy's

    Aurobindo

    Wockhardt

    Lupin

    Sun

    overseas. In 2002, Dr Reddy’s acquired BMS Laboratories in the UK, Ranbaxy acquired a 10 per cent stake in Nihon Pharmaceutical Industry, Japan. Ranbaxy acquired RPG Aventis in France, Terapia (Romania), Ethimed (Belgium) and Allen (Italy) and many others in 2006 alone. Wockhardt acquired Espharma in Germany. More recently, Nicholas Piramal India acquired Pfizer’s manufacturing unit in Morpeth, UK while Dr Reddy’s acquired Roche’s active pharmaceutical ingredients unit in Mexico in 2005 and Betapharm of Germany. Overseas buys have become an integral part of the strategies of all leading domestic companies, though the objectives may vary – some firms use them as an entry vehicle into a new market while others use them to get access to manufacturing assets.

    There is also a shift in the focus from bulk drugs to higher margin formulations, and a shift towards high growth therapeutic segments like anti-diabetes, CVS, CNS. All these changes have increased concentration at the top in the pharmaceutical industry. According to OPPI, the top 10 companies controlled 27.2 per cent of the pharmaceutical market in India in 1995. Concentration has increased over time and now the top 10 companies’ cumulative share is around 42 per cent (Table 9). The domestic retail formulations market (which is 70 per cent of the total market) shows a similar trend.

    The individual market share of the companies does not reveal the actual intensity of competition. The actual competition takes place within therapeutic segments which cater to distinct diseases of any population. On the basis of retail formulations data for the month of February 2006 from ORG IMS, the level of competition can be observed for some drugs, including drugs like ciprofloxacin, which is a drug under DPCO. All these drugs are sold as off patented drugs since they entered India much before 2005.

    Table 10 shows that the prices within various therapeutic categories reflect an oligopolistic structure despite generic competition. This is because the formulations market cannot be a perfectly competitive market or even close to it as the consumer and the decision-maker for consumption are not the same people. Most of the drugs are prescription drugs and the doctor who prescribes the drug, is quite insensitive to price and is mainly guided by brand. That is why if one looks at the share of advertising and marketing expenditure as a proportion of total sales of the drug companies, it is much higher than their R&D expenditure as a proportion of total sales.

    Composition of Foreign Direct Investment

    From the early 1960s, the investment of foreign controlled rupee companies (FCRC) and foreign branches in medicines and pharmaceuticals as a proportion of total foreign investment increased steadily 4.1 per cent in 1964, 7.6 per cent in 1974, 9.8 per cent in 1978 and 11.35 per cent in 1980. (RBI Bulletin, India’s International Position, July 1975, March 1978 and April 1985). This increase in foreign investment, despite greater restrictions on the activities of foreign companies, can be explained only through the stipulations under the Drug Policy of 1978. The government gave production licences to FERA companies only if they were involved in high technology bulk drugs and related formulations, provided half of the bulk drug manufacture was sold to other formulators. Also, they were required to produce bulk drugs and formulations in the ratio 1:5 which was further made more restrictive in the Drug Policy of 1986 by changing the ratio requirement to 1:4.Thus foreign investment increased in a period of stringent regulations along with an increase in productive capacity – though no new MNCs entered the Indian

    Table 8: Select Mergers and Acquisitions in the Indian Pharmaceutical Industry

    Year Acquirer Acquired

    2005 Torrent Heumann Pharma, Germany 2004 Sun Pharma Phlox Pharma 2004 GSK GSK and Burroughs Welcome (India) merged 2003 Pfizer Business of Parke Davis 2003 Nicholas Piramal Joint venture with Sarabhai Piramal 2002 Matrix Laboratories Merged Medicorp Technologies 2002 Wockhardt Stake of Rhein Stake in German Remedies 2001 Aventis Pharma Merger of Hoechst Marrion and Rhone

    Poulenc Rorer 2000 Dr Reddy’s Acquisition of America Remedies 1997 Ranbaxy Lab Merger with Croslands Research Labs

    Table 9: Share of Top Companies in Total Production in Both Bulk Drugs and Formulations

    Company 1995 2000 2005

    Ranbaxy 7.69 8.88 8.69 Cipla 3.64 4.00 5.80 Dr Reddys 2.14 2.44 3.71 GSK 9.72 4.86 3.84 Aurobindo 0.91 3.72 2.80 Sun 0.72 2.45 2.53 Nicholas Piramal 1.00 2.52 3.14 Wockhardt 0.00 2.89 2.57 Lupin 0.5 4.5 3.2 Cadila -2.41 2.77 Combined share of top 10 firms 26.47 36.97 38.84

    Sources: (i) Annual Reports of Companies.

    (ii) BDMA.

    Table 10: Extent of Competition in Therapeutic Segments*

    Name of the Drug Therapeutic No of Share of Top Category Brands 4 Brands (Per Cent)

    Ciprofloxacin Quinolones 200 60 Levofloxacin Quinolones 45 48 Chloroquine Anti-Malaria 43 93 Quinine Anti-Malaria 24 85 Rh Adults Anti-Tuberculosis 63 79 RHEZ FD (Rifampicin +Isoniazid+

    Pyrazinamide) Anti-Tuberculosis 40 70 RHE(Rifampicin +Isoniazid+

    Ethambutol) Anti-Tuberculosis 42 65 Atorvastatin Statins 75 47 Simvastatin Statins 25 84 Lovastatin Statins 15 98

    Note: *The drugs categories include all dosages and forms of individual brands.

    Chart 3: Comparisons between R&D Expenditure and Selling Expenditure

    (as a percentage of sales)

    35

    30

    25

    20

    15

    10

    5

    0

    Ranbaxy Dr Reddy’s Cipla Nicholas Sun

    '

    R&D

    Selling

    Source: Annual Reports of Companies, 2004.

    pharma ceutical sector but many big companies like Ciba-Geigy, Pfizer, Glaxo and Johnson and Johnson continued and increased their manufacturing activities. Since 1991, the liberal policies invited foreign direct investment into various sectors. FDI up to 100 per cent is permitted on the automatic route for manufacture of drugs and pharmaceuticals, provided the activity does not attract compulsory licensing or involve use of recombinant DNA techno logy, and specific cell/tissue targeted formulations. However, the opening up on the FDI front coincided with dilution of ratio-requirement of bulk drugs-formulations production in 1994. From 1992-93 to 1995-96, the share of FDI inflows to pharmaceuticals was 4.1 per cent of the total FDI inflows, which declined to 2.5 per cent from 1998-99 to 2001-02 and has now again picked up and is 4.6 per cent in the period 2002-03 to 2005-06. The cumulative share over the last 15 years is around 3 per cent of the total FDI.

    But whether the liberalised industrial and FDI policies along with the signing of the TRIPS agreement to introduce product patents in 2005 have actually resulted in increase in investment in physical assets by MNCs or not is what we now turn to. The shareholding pattern of the MNCs in our sample has not changed much in the last 10 years. Except Astra Zeneca whose foreign shareholdings have increased from 50 per cent to 90 per cent in 2006, the rest have shareholdings to the tune of 40 per cent to 51 per cent. There is however a shift in their investment patterns. Though both domestic and multinational companies have increased their investments in government securities and company shares, MNCs’ ratio of total fixed assets to investment in financial securities has dwindled in the last few years. If we look at Table 13, it is apparent that though their physical assets are increasing, their financial investment is growing much faster so that, in absolute terms, the value of gross block which comprises of fixed assets like plant and machinery, buildings, land, etc, is less than investment in financial securities for the last three years; in contrast, gross block was twice the amount of investment in financial securities in 1995 (Table 12). This is indicative of their relative reluctance to invest in production capacity. The growth rates of domestic companies’ gross block and net block (excluding depreciation) are comparable with their investments in financial securities of government and other companies but MNCs’ preference for financial securities over physical assets is obvious from a much higher growth rate of these investments relative to gross block and net block over the period 1995-2005. Out of all the MNCs, Aventis has increased its investment in physical assets in the last few years. GSK also has a high level of investment though it is on the decline from 2001. The common factor among all the MNCs, except Astra Zeneca, is that their financial investments are increasing rapidly. Astra Zeneca is the only foreign company which has divested its financial securities. It is the only MNC which has production capacity in a few bulk drugs and an R&D unit in Bangalore for drug discovery and development for various indications, especially for tuberculosis. Among domestic firms, Lupin has reduced its financial investments. Other companies are increasing their financial portfolio but their physical assets build up is rising almost at the same rate if not faster.

    Shift in R&D Focus

    Across the world it is recognised that the approach to R&D is shifting to a model where innovation emerges from new ways of arranging existing technologies rather than discovering new ones. The application of new methods is possible without inventions, while inventions as such need not necessarily lead to innovations. In the field of pharmaceuticals, much of the research is done in university laboratories and is sponsored by governments. It is the latter stage, namely, development, which is undertaken

    Table 11: Sectorwise FDI Inflows (Cumulative) during August 1991-December 2006

    S Sector FDI Inflows Per Cent of No (Rs million) Total Inflows

    1 Electrical equipments 3,02,558 17.03 2 Services sector 3,01,327 16.96 3 Telecommunications 1,65,535 9.32 4 Transportation 1,49,924 8.44 5 Power and Oil Refinery 1,18,485 6.67 6 Chemicals 92,518 5.21 7 Drugs and pharmaceuticals 50,262 2.83 8 Food processing 49,240 2.77 9 Cement 41,832 2.35 10 Metallurgical industries 3,44,943 1.97 11 Others 4,18,868 26 Total 20,35,492 100

    Source: Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

    Table 12: Shifts in Investment Portfolio

    (G/I)dom (G/I)mnc (N/I)dom (N/I)mnc

    1995 2.34 1.96 1.69 0.92 1996 3.75 3.97 2.96 1.84 1997 3.56 4.02 2.76 1.99 1998 4.10 3.65 3.18 1.71 1999 3.09 3.89 2.29 1.76 2000 3.82 3.40 2.69 1.55 2001 3.42 4.14 2.41 2.33 2002 4.19 4.21 3.00 2.22 2003 4.55 1.90 3.45 0.93 2004 2.60 1.06 1.92 0.42 2005 3.03 0.90 2.21 0.34

    Notes: G: Gross Block, N: Net Block, I: Investment in financial securities. The value of gross block, net block and financial investments for domestic and foreign companies are calculated from the annual reports by aggregating these values separately for the nine domestic firms and six foreign firms.

    Source: Based on data from Annual Reports.

    by major pharmaceutical companies. Mansfield (1995) found that 27 per cent of new products in the pharmaceutical industry in the US could not have been developed without underlying academic research and an additional 29 per cent were “significantly facilitated” by academic research.

    The first stage of drug product cycle is discovery which entails identifying the biological targets (i e, a protein or other biopolymer) known to be involved in the disease’s etiology, and then discover the compound, or compounds, that have an effective and specific therapeutic capability and a minimum number of side-effects. This stage requires relatively lower investment and some of the large Indian companies have set up research laboratories to conduct research in the face of competition from global players. Earlier, Indian firms skipped this part entailing basic research and invested in process reengineering and NDDS (Novel Drug Delivery Systems). With the new patent regime, some firms have demerged their R&D units from the manufacturing set-ups to concentrate solely on the innovative part of the drug. Sun Pharmaceuticals has demerged from its R&D unit, Sun Pharmaceuticals Advanced Research Co (SPARC) to undertake independent research for the company. Similarly, Dr Reddy’s in March 2006 joined hands with Citigroup venture and ICICI venture to form an integrated drug development company called Perelecan Pharma to accelerate the development of its four discovery molecules in the area of cardiovascular and metabolic disorders (Annual Reports, 2006).

    India is also becoming a favoured destination for clinical research for many multinationals. The clinical trials (CTs) on human subjects have to be conducted under strict guidelines to test safety and efficacy of the molecule before granting production and marketing approvals. Clinical trials are exacting and consequently expensive to administer. With increasing pressure on R&D expenditure amongst the big global pharma companies, India’s large and relatively poor and uneducated patient population is well suited for clinical trials. Phase I of clinical trials involves testing of new compounds on 20-80 healthy human beings. Phases II and III test the compound on a larger number of patient volunteers for safety and efficacy and determine the best dosage mechanism. On successful completion of clinical trials, the company gets the regulator’s approval to market the drug. Table 14 presents the extent and the areas of focus in clinical trials by MNCs.

    In multicentric trials, MNCs carry out trials in various centres across the globe focusing on drugs suitable to the needs of the developed world. That is why one observes a bias towards lifestyle related diseases. Except trials in visceral leishmaniasis by GSK, all trials belong to global diseases. The subsidiaries of MNCs in India are using India as a centre for clinical studies and not for any basic research. Apart from a few collaborative arrangements with some local companies, MNCs are basically tapping India’s population for clinical trials as it is extremely difficult to get registration for CTs in their parent and other developed countries. GSK earned 37.5 per cent of its foreign exchange on account of clinical research and data management in 2005. Three-fourths of Pfizer India’s clinical research relates to phase II and phase III studies executed on behalf of Pfizer Global Research and Development (PGRD) worldwide teams. Only AstraZeneca among MNCs has set up a research unit in Hyderabad for tuberculosis. GSK, Novartis and Merck are spending less than 0.5 per cent of their sales on R&D. As phase II and phase III of clinical trials involve major expenditure and are beyond the financial capabilities of most Indian companies, they have to opt for licensing out their molecules rather than undertake clinical trials on their own. Ranbaxy, Dr Reddy’s and Cadila are entering into such agreements with global majors where they are licensing out molecules. Recently Wockhardt acquired an innovative French company, Negma-Lerads for $ 265m (€195.4m). This is the first ever takeover of an innovative firm by an Indian company to facilitate its research programmes.

    Table 15 provides a picture of research strategies undertaken by Indian firms. Most of the companies started drug development in new molecules since 1995 and have development partners for their research programmes, especially in the later stages of drug development. The Table 15 cites a few research programmes carried out on new chemical entities. It is apparent that apart from one project on an anti-malarial drug by Ranbaxy and a study on tuberculosis by Lupin, all other drugs being developed in the country either belongs to lifestyle-related drugs like drugs for the central nervous system, cardiovascular system, diabetes or respiratory diseases. Most of the projects have to be licensed out to multinationals or contract research organisations for later stage developments, namely, clinical trials. And that is not simply because of limited capital but also inadequate training to conduct clinical trials, inadequate good clinical practice (GCP) conforming facilities and expertise of clinicians, clinical pharmacologists, toxicologists and analy tical chemists, which

    Table 13: Trends in Investment Growth of Domestic and Multinational Companies

    (Rs crore)

    Year Gross Block Net Block Investments in Securities DOM MNC DOM MNC DOM MNC

    1995 710.4 433.9 512.6 204.2 303.5 221.0 1996 897.3 439.1 708.6 203.3 239.5 110.7 1997 1,167.5 428.0 905.0 212.4 328.2 106.5 1998 1,568.0 454.1 1,214.5 212.6 382.4 124.5 1999 1,524.3 463.6 1,128.3 209.4 492.7 119.2 2000 1,738.6 502.3 1,224.1 230.0 454.7 147.9 2001 2,292.7 653.9 1,618.5 367.4 670.5 157.8 2002 2,706.2 652.3 1,941.9 344.2 646.3 154.8 2003 3,412.3 647.2 2,586.7 318.4 749.2 340.6 2004 4,033.8 631.4 2,973.5 251.2 1,550.2 593.1 2005 4,560.3 598.2 3,324.8 224.7 1,503.6 668.1 Compound annual

    growth rate (per cent) 20.0 5.0 19.4 3.8 19.2 16.1

    Note: All variables, gross block, net block and investments are indexed by the GFCF deflator.

    Table 14: Focus of MNCs in Clinical Trials in India

    Firm Number of Trials Areas

    Bristol Myers Squibb 20 CVS,CNS,Diabetes,Cancer, Hepatitis-B Eli Lilly 17 Diabetes, Cancer, CNS Pfizer 14 CVS,CNS,Diabetes, Renal disorder GlaxoSmithKline 12 CNS, Arthiritis, Cancer,

    Visceral Leishmaniasis Aventis 11 CVS, Cancer, Diabetes, Gastroentritis Astra Zeneca 9 CVS, CNS,Cancer Novartis 8 Hypertension, Hepatitis, CVS Merck 7 Fungal infection, HIV, Cancer, Diarrhea Bayer 5 CVS Boehringer Ingelheim 2 CVS

    Source: www.clinicaltrials.gov

    compel the domestic firms to licence out their molecules to much more advanced MNCs.There is hardly any research being undertaken by the industry for neglected diseases like malaria, tuberculosis and kala azar which afflict the developing countries. Apart from foundations like the Bill and Melinda Gates Foundation for HIV and leishmaniasis, MMV(medicines for malaria venture) for malaria and some other non-governmental organisations like Drugs for Neglected Diseases Initiative (DNDI), One World Health and some CSIR sponsored drug development programmes, most drug development is taking place in the chronic disease segment. Lanjouw and Cockburn (2001) suggest that the lack of R&D on tropical diseases in India may be due to the limited market size. Firm’s interest in finding therapies for some diseases may be hampered by markets which are simply economically or epidemiologically too small, in which case the availability of intellectual property rights will never be sufficient incentive to invest. As far as MNCs are concerned, GSK India spent only 0.29 per cent of its net sales on R&D and Novartis spent 0.3 per cent in 2006. Pfizer’s R&D spend ratio stood at 3.5 per cent as against Dr Reddy’s 12.9 per cent, and Ranbaxy’s 6.5 per cent. In fact, if one looks at the protected patent regime of India, it is the multinational corporations like Ciba Geigy, Hoechst and Boots, apart from some public sector research institutions, that had set up their R &D units and not Indian private producers. Therefore, the patent regime was not responsible for the limited research. The lack of research has to be attributed to the structural bottlenecks instead.

    There are two alternative solutions to give incentives for invest ment in drug development, especially for neglected diseases – push programmes whereby the drug developer is provided favourable tax credits and pull programmes by committing in advance to purchase a specified amount of a desired product at a specified price. Whereas push programmes are fraught with moral hazard and adverse selection problems, pull programmes require purchase commitments by international organisations, private foundations or national governments.

    IV Conclusions

    In honouring the WTO mandated product patent regime, the Indian pharmaceutical industry is shifting its focus away from the domestic market to the generics market in the developed world which is going to expand in the next two years when many drugs are going to be off patent. Although India has become a net exporter of pharmaceuticals, the import dependence on bulk drugs, which is the manufacturing segment, has steadily increased over the last 10 years. There is a shift away from bulk drugs towards high valued formulations by both domestic companies and MNCs. Even though some domestic firms are becoming dependent on bulk drugs imports, they are net foreign exchange earners; some of the big companies earn more than half of their revenues from exports. As far as MNCs are concerned, their share in both bulk drugs and formulations is declining and investment preferences are heavily tilted towards financial securities. The MNCs want to bring in their patented drugs without any domestic competition. The new patent regime will prove to be detrimental for both the patients due to high costs of drugs and for domestic manufacturers as they will be unable to manu facture any post-1995 patented drugs through alternative processes. This is the main reason why big companies like Ranbaxy, Dr Reddy’s, and Cipla have started raising revenues through exports in the last 10 years in the huge off-patent global drugs market.

    Unless the government uses the flexibilities provided in Articles 30 and 31 of TRIPS like compulsory licensing for essential drugs, there will be serious repercussions on future access to essential drugs not only in India but around the world at affordable prices. The pharmaceutical industry is undergoing a process of consolidation whereby there is concentration at the top due to mergers and acquisitions to tap the opportunities emerging in the domestic as well as the global market in the various stages of the value chain such as R&D, manufacturing and marketing. Given the structural bottlenecks and the risk and time involved, big domestic firms do not and cannot spend the required amounts on R&D. Cost, in effect, is the crux of the issue. Estimates of the costs of drug development vary, but one widely quoted figure is $1 billion per drug, which is staggering by third world standards. Only one in five drugs that start human trials reaches the market. This high investment in R&D – with its attendant risks – is one reason why the pharmaceutical industry has shown a noticeable lack of incentive to invest in developing medicines and therapies for “non-profitable” diseases that plague the poorer countries. In the face of intense competition from MNCs post-2005, some companies have raised their investment in research though they need to out-licence their molecules to multinationals for clinical trials. By itself, no Indian domestic company is equipped to bring out a drug from the investigational stage to final marketing stage. Therefore there are a number of collaborations between MNCs and domestic companies, apart from licensing agreements. This has resulted in the bias in drug development. The MNCs are obviously in favour of developing drugs which are more suitable for the developed world. Thus barring a few cases, much of the research is undertaken for lifestyle-related diseases. Here the role of the government is of utmost importance. Even most deve loped countries’ pharmaceutical industries rely on the government-funded laboratories and academic research for R&D in this sector. The breakthrough drugs typically come out of government-funded laboratories. Therefore, governmentfunded research organisations have to expand their role by partnering with the private sector.

    Table 15: Research Pipeline of Domestic Firms

    Company No of Studies in Different Clinical Stages Therapeutic Segment Research Strategy
    Dr Reddy’s Ranbaxy Lupin Nicholas Piramal Cadila Healthcare Glenmark Wockhardt Malladi Drugs Sun Pharmaceuticals 7 10 4 6 4 6 4 1 1 Diabetes Cardiovascular, Diabetes Tumours Oncology Anti-Malaria Anti-Asthma , BPH Anti-TB, Anti-Psoriasis, Anti-Migraine Anti-cancer agent, Inflammation and Antifungal Anti-Inflammation, Diabetes, Dyslipidemia Asthma Diabetes Osteoarthritis Broad spectrum antibiotic, Insulin Thrombinase Antihistamine Partnership with Rheoscience Assigned to Perlecan Development with a CRO Partnership with MMV Licensed to Forest Labs, UK and Teijin Pharma, Japan Merck Under licence from ICMR
    Source: Annual Reports.
    3966 Economic and Political Weekly September 29, 2007
    EPW

    Email: ravinder.jha@rediffmail.com

    Notes

    [The author wishes to thank Jayati Ghosh for several useful comments on an earlier draft.]

    1 According to IMS Health, another $ 20 billion worth of branded sales

    would be susceptible to the entry of generic equivalents in 2007. 2 See (i) http://www.imshealth.com/ims/portal/front/article

    C/0,2777,6025_3665_79210022,00.html

    (ii) http://www.imshealth.com/ims/portal/front/article

    C/0,2777.6599_3065_80560241,00.html. 3 India is the 16th largest exporter of medicines in the world in 2005 (UN COMTRADE Statistics 2005) though its share in value terms is

    1.12 per cent at $ 23,18.1 million.

    4 To sell a bulk active, it is necessary to submit an application to the United States Food and Drug Administration, containing information about the facilities, processes and articles used in the manufacturing of the bulk active.

    5 Even domestic companies subcontract their production requirements under loan licensing to small local manufacturers. The exact share is not known.

    6 A recent introduction of the Rockfeller-Schumer-Leahy Act proposing to prevent authorised generics during the 180-day exclusivity period may lessen the pressure on generic players (Ranbaxy Annual Report 2006, p 34).

    References

    Expert Committee (2003): A Comprehensive Examination of Drug Regulatory Issues, Including the Problem of Spurious Drugs, Ministry of Health and Family Welfare, Government of India.

    Hathi Committee Report (1975): Report of the Committee on Drugs and Pharmaceutical Industry, Ministry of Petroleum and Chemicals, government of India.

    Lanjouw J O (1998): ‘The Introduction of Pharmaceutical Product Patents in India: Heartless Exploitation of the Poor and Suffering?’, Economic Growth Centre, Yale University, NBER Working Paper No 6366.

    Lanjouw J O and Iain M Cockburn (2001): ‘New Pills for Poor People? Empirical Evidence after GATT’, World Development, Vol 29.

    Mansfield, E (1995): ‘Academic Research Underlying Industrial Innovations’, Review of Economics and Statistics, Vol 77.

    Maskus (2000): Intellectual Property Rights in the Global Economy, Washington DC – Also available on www.innovativemedia.co.uk

    Subramanian K K and M Pillai (1979): Multinationals and Indian Exports, Allied Publishers, New Delhi.

    Water Supply & Sanitation Collaborative Council (WSSCC)

    The WSSCC (Council) exists under a mandate from the United Nations. The Council governed by a multi-stakeholder steering committee elected by the Council’s members, combining the authority of the UN with the flexibility of an NGO and the legitimacy of a membership organisation.

    The WASH India coalition comprises a large number of member organisations and individuals from all over India. WASH India invites applications from experienced and professionally qualified candidates for the following position for WASH India, to be based in New Delhi.

    WASH India Manager Advocacy Support

    The position will report to the National Coordinator of WASH India (currently Country Representative of WaterAid India) and will have to work in close collaboration with Director Policy and Partnership of WaterAid India. The position is based in New Delhi but may require travel to different parts of the country.

    The package for the position will be around Rs. 6 lakhs/pa Job Description

    The incumbent will be reporting to the National Coordinator of WASH India and is expected to handle the following tasks;

  • Organise and support WASH India members in research, networking and advocacy.
  • Dissemination and advocacy – liaison and coordination with other organizations and media.
  • Supporting the WASH National Coordinator with monitoring the annual plan, organizing meetings and developing minutes and action plans.
  • Developing funding proposals and reporting to donors.
  • Provide coordination, logistics and any other support for WASH India work.
  • Managing the WASH India desk – provide regular information and updates.
  • Engage with any research, documentation or advocacy activities that are assigned by the National Coordinator and Director Policy and Partnerships WaterAid India.
  • Requirements for this position

    The incumbent should be a middle level experienced water and sanitation professional with at least 5 years of work experience. We are looking for individuals with relevant work experience in water and sanitation but more important skills in research, documentation, networking and advocacy. Experience of working with Knowledge Networks and national/regional coalitions/ campaigns, will be valued.

    Please send in your application with cv at: HR@wateraidindia.org. Only short-listed candidates will be invited for an interview. Last date for receiving completed applications is 15th Oct 2007.

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