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September - 2009 - issue > India Road Ahead
Pharmaceuticals - Healthy Future Ahead
Ranga Iyer
Tuesday, September 1, 2009
Two industries have put India on the world map – IT and pharmaceuticals. India’s pharmaceuticals industry, currently valued at over $ 8 billion, is expected to double in size by 2015, growing at a compounded annual rate of 9.5 percent.

The industry has done India proud. It has contributed to improving health indicators like reduced infant mortality rate and increased life expectancy. India is today the world’s fourth largest pharmaceutical producer in terms of volume. It is fourteenth in the world in value, because our medicines are among the lowest priced in the world. India has more than 100 manufacturing sites approved by the US FDA, the largest number outside North America.

That’s the positive side; now take a look at the other side. The Indian government spends 1.2 percent of GDP on healthcare, which is among the lowest in the world. According to a reply tabled in the parliament in July, the per capita expenditure incurred by the government to provide healthcare facilities is a mere Rs.37 per month.

For a country of our size, we have too few hospitals and doctors. We have 0.6 doctors per 1,000 people compared to 1.15 in Brazil and 1.06 in China. Over 80 percent of Indians pay for healthcare from their pockets in the absence of health insurance. Only 35 percent of our population has access to modern medicines, because of poor healthcare infrastructure.

There is a misplaced view that cost of medicine is standing in the way of access to medicine. This is not true. Over 200 million women and more than 80 percent of children in India suffer from iron-deficiency anemia. The cost of iron supplement is only one rupee. Its affordability has not impacted availability in rural areas, and the problem is a case of access failure. Similarly, the coverage of routine childhood vaccination is only around 60 percent, though these vaccinations are provided free. Another example is antiretroviral therapy provided free by the government – it reaches less than six percent of the patients.

There is immense growth opportunity ahead for the pharmaceutical industry on both fronts – within India as well as outside India. Medicines are, after all, like software. It needs the hardware of health infrastructure to deliver its benefits. More doctors, more clinics, more hospitals, and more chemists, especially in the countryside, will ensure more access to modern medicines for our people. Better health will translate to better productivity and better quality of life.

Rising R&D costs and falling productivity have made research-based companies in Europe and the US to turn to emerging markets like India and China with a view to cutting costs and tapping talents outside their own companies. It is a win-win situation for pharmaceutical majors as well as for Indian companies that are aspiring to move up the learning curve in new drug discovery.

Unfortunately, China is scoring over India in attracting high value investments and collaborative ventures, as China has patent laws that are in line with global standards. India has adopted a restricted definition of patentability. And, unlike China India does not give data protection, which prevents generic companies from commercially using data developed by innovator companies at great cost. It is time to revisit our laws and make them conducive to foreign investment and greater collaboration between Indian companies and the multinationals.

If India can capitalize on the opportunities within India and abroad, the day will not be far away when India will be known worldwide for Invented in India medicines in addition to Made in India medicines.

The author of the article is Ranga Iyer, Manging Director, Wyeth Limited; President, Organisation of Pharmaceutical Producers of India
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