CHAPTER – 1

INTRODUCTION

1.1 HISTORY

1.2 PROFILE OF PHARMACEUTICAL INDUSTRY

1.3 SWOT ANALYSIS OF PHARMACEUTICAL INDUSTRY

1.5 NON-STEROIDAL ANTIINFLAMATORY DRUGS( NSAID’S)

CHAPTER - 1

1.1 HISTORY

Indian economy is one of the fastest growing economies in the world. Its GDP

growth rate at 9.2%and GDP of Rs 177000 crore is the 12th largest economy in the

world.

The speed of India‘s industrialization is measured as the second fastest in the world.The Pharmaceutical sector is one of the major industries in our country, and among

the most organized sectors. The industry plays an important role in promoting and

sustaining development in the field of global medicine.

A burgeoning healthcare market and a resultant window of opportunities have set the

stage for rapid expansion of the Indian pharmaceutical industry. The pharmaceutical

industry is already growing at a rate of 9% p.a. which is expected to rise further in the

years to come.

Indian companies have also developed a considerable service industry for the global

pharmaceutical market .Indian pharmaceutical companies are able to provide FDA

approved facilities for the complete range of services for drug development, R&D

services, API sourcing, finished formulation manufacture and clinical trials can all be

completed in India, at less cost than in many developed markets.

Leading Indian pharmaceutical companies are also beginning to increase market

presence and market share in the US and EU markets .Global pharmaceutical

companies have already begun to take advantage of the changing regulatory and

economic conditions in India. It is estimated that the coming years will see further

mergers and acquisitions including key overseas acquisitions.

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INDIAN ADVANTAGE

Thanks to low costs, qualified staff and extensive production and research units, India

is becoming more and more of a major pharmaceutical location. Among Asian

countries India‘s pharmaceutical industry ranks fourth but has lost market share toChina as sales growth there has been nearly twice as high sales volume nearly four

times higher than in India.

Indian pharmaceutical industry currently comprises about 20,000 licensed companies

employing approximately 500,000 people. The Indian pharmaceutical industry

produces a total of about 70,000 different drugs, which is higher than that produced in

Germany. Demand in India is growing markedly due to rising population figures, the

increasing number of old people and the development of incomes. As a production

location the country is benefiting from its wage cost advantages over western

competitors also in terms of production of medicines.

The generics market will grow in both the developed countries and in the emerging

markets. Most vital medicines are already exempt from patent protection. The

manufacture of generic drugs in that segment is growing strongly. In addition patents

for higher turnover drugs with a volume of 100 Bn Euros will expire in the next few

years .Of these drugs, roughly one-third will likely be produced by Indian companies.

In the coming years Indian drug makers will likely continue to look to foreign

countries to expand their operations. According to PWC about half of all larger Indian

drug makers are looking to expand abroad through take—overs the targeted markets

being the US and Europe.

According to study by FCCI—Ernst & Young India will open a probable US $ 8

billion market for MNCs selling expensive drugs by 2015. The domestic

pharmaceutical market is likely to reach US$ 20 billion by 2015. The Retail

pharmaceutical market is likely to cross US $ 13 billion by 2012.

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1.2 PROFILE OF PHARMACEUTICAL INDUSTRY

History

Since ancient times, two systems of medicine were present in India. First was

ayurvedic medicine, which was the vedic period. Ayurveda depends largely on the

combination of various herbs, minerals and metals like gold, copper etc. Second was

the Arabian system of medicine. brought to India by no of invasions. However

Allopathic and Homeopathic were the two systems of medicine in the western part of

the world.

Even though Ayurveda was advanced it did not become popular due to a long British

rule and development of medical education based on typical ―British model.Allopathic/Modern medicine took root in India and all research and development was

on Allopathy. There was no research and development in Ayurvedic medicine even

though the government made efforts to promote ayurveda.

Origin of the Indian Pharmaceutical Industry

It Originated in the nineteenth century when medicines were imported by the British

for their personal use when they came to India to do business. When the British took

over India the imports became a regular feature.

Pharmaceutical products were imported mainly from United Kingdom and Germany.

The pioneering efforts of Acharya P.C. Ray led to the establishment of Bengal

Chemical and Pharmaceutical Works with the Indigenous production of medicines in

nineteen thousand and one.

The period after one thousand nine hundered and four saw the establishment of four

research institutes in India namely the Hafkine Institute, King Institute, Central

Institute and Pasteur Institute.

Domestic production of pharmaceuticals like manufacture of caffeine and surgical

dressings started during First World War but after the war imports started and Indian

industry could not survive due to competition from imports.

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Manufacture of Tetanus antitoxin a basic drug was started by the Bengal Chemical

and Pharmaceutical Works in one thousand nine hundred and thirty but it could meet

only twelve of medical requirements.

The Second World War played a significant role in the history of pharmaceutical

industry leading to increase in capacity expansion. By one thousand nine hundred and

forty two pharmaceutical industry took up manufacture of drugs like ephedrine,

codeine, and quinolines and production of chemotherapeutic drugs. Bulk drugs were

imported and converted into formulations increasing manufacture of pharmaceuticals.

At the time of independence the pharmaceutical industry was nascent and could not

make much progress due to lack of government support. The turnover of the

pharmaceutical industry in nineteen forty seven was in the range of nine to ten crores.

POST INDEPENDENCE PERIOD

The Government of Independent India outlined a planned economic expansion about

four decades ago ,at that time the development of the Indian pharmaceutical industry

was not adequate with the size of the country or the growing needs of the population.

Since the post independence period the growth of the pharmaceutical industry in the

country has been substantial and can be termed as ―RADICAL‖.

RADICAL GROWTH

The Indian pharmaceutical industry is driven by knowledge skills, low production

costs, and quality. Due to this there is demand from both domestic as well as

international markets.

This has resulted in a robust growth of around fourteen percent since the beginning of

the eleventh plan in 2007, from about rupees seventy one thousand crores to over

one lakh crores in 2009-10 comprising rupees sixty two thousand and fifty five

crores of domestic market and exports of over rupees forty two thousand one hundred

and fifty crores

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The combination of a strong knowledge base and cheap labour has transformed India

into a powerhouse in the global pharmaceutical market. Having established a strong

position by manufacturing generic drugs, the industry is now moving up the value

chain.

According to the research by the Associated Chambers of Commerce and Industry

(ASSOCHAM) the Indian pharmaceutical industry is projected to achieve a turnover

of $ twenty billion by 2015 making India one the world‘s top ten pharmaceuticalmarkets.

COMPOSITION OF THE PHARMA SECTOR

The pharmaceutical industry is rightly called as Life saving industry. It plays a major

role in the suffering of millions of people regulating various ailments that affect

human beings. Hence Pharmaceutical industry after independence has been

considered as the industry which forms a driving force for the growth of the country.

The current Indian pharmaceutical sector has three main units

1. The public units

2. The Indian units

3. The foreign units

The organized sector which is about two percent of the total no of manufacturing units

accounts for about seventy percent of the total value of drug production whereas the

remaining ninety eight of the units accounts for only thirty percent of the total

production value of the formulations in the country.

PRODUCTION

The industry is quite fragmented and comprises of nearly ten thousand five hundred

units with majority of them in the organised sector. Of these about three hundred to

four hundred units are categorised as belonging to medium to large organised sector

with the top ten manufacturers accounting for thirty six percent of the market share.

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As regards the BULK DRUGS component of the industry the market is around

Rupees forty thousand crores giving it a share of around fifty percent of the total

domestic market. This gives the Indian Bulk Drug Industry a share of about nine

percent of the global bulk drug market.

EXPORTS

India is among the top twenty pharmaceutical exporting countries and the exports

have grown very significantly at a CAGR of around nineteen percent in the eleventh

plan period. Indian drugs are exported to around two hundred countries in the world

with highly regulated markets of USA, UK and Far East Countries.

The industry is ranked third globally in volume and fourteenth in value supplying

around ten percent of the total global production. This also amounts to around twenty

nine percent of total volume of global generics. Thus every fifth Tablet, Capsule and

injectable in generics drugs consumed anywhere in the world is manufactured in

India.

RESEARCH AND DEVELOPMENT

The R&D expenditure was estimated to be around Rupees four hundred and ninety

seven crores during two thousand three which is about two percent of sales. There

are eighty drug units with in-house R &D facilities approved by the Department of

Science and Technology, Government of India. In developed countries,

pharmaceutical companies spend about ten to twenty percent of sales on R & D.

There are about a dozen companies in India which spend more than Rupees hundred

lacs per annum on R&D

PRESENT STATUS

TECHNOLOGY

Technology is of MAJOR importance to the pharmaceutical industry. After

Independence there has been heavy import of technology into India.

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The imported technology was suited to local conditions and improved upon in most

cases by Indian scientists.

Such improvements made Indian pharma companies export bulk drugs &

formulations to developed countries like U.S, Germany, U.K., Switzerland, Canada

and Australia .due to which the Indian pharmaceutical industry has gained net-

exporter status. There are still major areas where India needs technological know-how

for the pharma industry vis-a vis pharma industry of the developing countries.

DRUG SYNTHESIS

The FIRST drug discovered in India was urea stibamine in nineteen hundred and

twenty two. The second drug methaqualone was synthesized at the Regional Research

Laboratories of Hyderabad. Pharmacological studies were conducted on this at

Lucknow and this was developed commercially developed in the U. K.

The third drug was Haymycin an antibiotic developed by Hindustan Antibiotics Ltd, a

public sector undertaking. The fourth drug enfenamic acid was synthesized at the

Regional Research Laboratories, Hyderabad and was marketed by Unichem under the

brand name Tromaril.

Ciba-Geigy marketed the fifth drug an anti-depressant by name Sintamil. Compared

to this the six developed countries Italy, West Germany, France, the U.K. the U.S.A.

and Japan had introduced as many as two thousand five hundred and sixty seven new

drugs during the ten year period between 1970-80. During the same period as many as

six thousand three hundred and seventy four new compounds had undergone clinical

trials.

The Indian pharmaceutical industry could not introduce more than a handful of drugs

in the last forty years, the reason being

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The expenditure aspect: The prohibitively high cost of new drug discovery is

the first and foremost reason. It is estimated that a new drug discovery (from

concept to commercialization ) would cost on an average about US $850

Million, with a gestation period of ten to twelve years.

Low down revenue fringe: Large international pharmaceutical companies

spend about 10 to 20% of their annual sales volume on R & D. Most

pharmaceutical companies in India would consider themselves fortunate and

successful if they could make 10% as net profit before tax (NPBT).

o R &D expenditure in India therefore is around an insignificant two

percent of the sales volume of the larger companies. Much of the

R &D is concerned with ―Process Innovation‖ rather than new drugdiscovery.

Scarce economic encouragements: Thirdly the fiscal incentives provided by

government are hardly adequate to support the high cost of R & D and the risk

of uncertainty. The incentives currently offered are :

o A seven year patent protection and a five-year period of exemption

from price Control. The patent protection one will observe is much less

than the gestation period of a new drug.

o The five year exemption from price control is hardly adequate to earn a

decent return on the time and money spent on R & D for a new drug.

Some fiscal incentives for the promotion of R & D by the Dept. of Science and

Technology as a part of promoting and supporting indigenous technology are:

Capital expenditure on R & D can be written off in the income

tax return for the year in which it was incurred

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Weighted deduction, for income tax purposes of one third of

the amount paid to an approved scientific research association

or a university or college for undertaking scientific research

under an approved programme.

Weighted deduction for income tax purposes of 125 % of the

expenditure incurred for in-house scientific programmes

approved by the Department Of Science and Technology.

BROADENING THE PERSPECTIVE

The rate of obsolescence among certain drugs is very fast resulting in a technology

bias in the pharmaceutical industry the world over. Hence the pharmaceutical industry

is technology driven.

The rate of product obsolescence can be observed from the fact that about seventy per

cent of the drugs commonly used today were nonexistent about thirty years ago.

No single country developed from its domestic sales, can meet the high cost and risk

of failure of R &D for developing new drugs. A new drug has to be marketed globally

which explains the increasing trend in technology trade.

India‘s expenditure on Technology is only tiny fraction of that of even developingcountries like Brazil and Mexico.

The basic need now is to shift the focus of our development efforts from a creation of

additional capacities with outdated techniques to enhancing the technological levels of

the various sectors of our industry. The shift in emphasis cannot be brought about,

without substantially broadening our perspectives on the question of technology

transfer.

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CLUSTER OF INCONSISTENCIES

The Indian pharmaceutical industry has a probing cluster of inconsistencies.

Inconsistency 1: Restricted prices and Costly drugs

The industry has been subjected for more than two decades to an increasingly

stringent system of price controls currently covering about four-fifths of its

production of drugs and formulations but the impression is still persists that the prices

of medicines are on the higher side.

Inconsistency 2: Metropolitan Industry

In spite of the dramatic progress and the growth over a sixty year period the benefits

of modern medicine have not reached about two-thirds of the population effectively.

The pharmaceutical industry in India even today seems to be urban-oriented.

Inconsistency 3 : Fitness concern trade not at your best

In spite of the pharmaceutical industry‘s impressive overall growth the industrywhich produces drugs and formulations for the health of the people is not really

robust.

The per capita availability of pharmaceuticals in India continues to be among the

lowest in the world a mere rupees thirty per year and the average for the rural areas is

less than rupees ten. Which is just four percent of what the United States spends on

pharmaceuticals, eight percent of the UK‘S per capita consumption and only twopercent of what an average Japanese spends on medicines. Even Mexicans seem to

spending more than four times on pharmaceuticals as compared to their counterparts

in India.

Inconsistency 4 :Uundersized range on a outsized range

Maintenance of high quality standards in the production of both bulk drugs and

formulations is of utmost importance. Any laxity or compromise in the quality of

drugs may spell the difference between life and death.

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It is common knowledge that many small scale manufacturers do not have technically

qualified competent manpower necessary to ensure quality control. They are also not

in a position to meet the conditions required for Good Manufacturing Practices(GMP)

Many experts feel that pharmaceutical production does not lend itself to small scale

operations , but still in the recent years there has been a significant increase in the

production of formulations by the small scale sector.

Inconsistency 5: Propagation of trademark or Mechanized division

There are too many brands, which are not necessary and this propagation of trademark

is leading to wastage of productive capacities which could have been used effectively

for some other essential products. This also results in unhealthy competition between

too many brands. It is more of the propagation of manufacturing units in the small

scale sector that is leading to ever increasing similar brands.

Inconsistency 6: Control on amount produced, but no control on effort

The introduction of the Drug Price Control Order of nineteen sixteen nine and the

subsequent Drug Price Control Orders have been a major setback for the

Pharmaceutical Industry.

What is peculiar to pharmaceutical price control is that while the prices of raw

materials as well as finished products are controlled, there is absolutely no control

whatsoever on the input costs.

The input costs seem to be ever increasing. As a result the mark-ups provided in the

essential product categories are lower than the breakeven points. Also there is a

ceiling on the profitability of the manufacturing units.

Inconsistency 7 : Licensing policy or silencing policy

The Industrial licensing policy in the pharmaceutical industry contains some policies

which have reduced the growth of the pharmaceutical industry instead of stimulating

the growth ,some of them are as follows.

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Reservation of some essential bulk drugs for the less efficient public sector

Preference given to small scale sector which cannot hope to achieve the

economies of large scale manufacture.

Fragmentation of capacities for bulk drug manufacture that is inherent in the

licensing policy itself. Bulk drug to formulation ratio parameters of one to

five or one to ten virtually force every manufacturer in the organized sector

to take up bulk drug production, irrespective of efficiency of operations and

consequent cost-effectiveness.

Delay, rejection and other roadblocks created in the way of issuing licenses

to FERA, and MRTP companies which have the ability to speed up large

scale manufacturing cost effectively.

THE PHARMACEUTICAL MARKET

The dimensions of the pharmaceutical market

1. The demographic dimension: This consists geographical proximity of the

customers and their shared socio-economic characteristics like age, income,

gender, education and size of the family.

2. The generic dimension: This consists of the general equivalents existing in a

number of formulations. E.g. all formulations having rifampicin will add up

to the total rifampicin and not to the anti-TB market.

3. The therapeutic dimension: This consists of all the products whose aim is to

relieve, treat, and cure the same symptoms or disease. For e.g all products

aimed at relieving, treating, and curing asthma come under the anti-asthmatic

therapeutic group.

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4. The competitive dimension: Rather than the size of the market, the extent of

competition that is the no of competitors, their market share, and their growth

rate play a very important role in finding the attractiveness, or unattractiveness

of the market. For example introducing another antibiotic may not be very

attractive even though the market size may be large because to many brands in

a crowded market will compete with each other and its growth rate may then

may also turn out to be very low. If one have something special then only one

should think of entering the market. Regular monitoring of the competitors

activities is very essential for success in the market place.

5. The Timing: It is the most important dimension. All those who have been

successful in various therapeutic groups are those products which were

introduced at the right time. It is not good to have a good product you should

be there in the market with your best product and best benefit package at the

right time. The firsts‘ with the moistest is the one who succeeds in the market

place. Timing is also very important for planning product deletion and

harvesting strategies. One should also be aware of the stage and rate of

product obsolescence in the market place. Research indicates that the

probability of success is greater if you are one of the first three to enter the

market, in any THERAPEUTIC CATEGORY. The early bird really catches

the worm.

PHARMACEUTICAL MARKET SEGMENTATION

In order to segment the pharmaceutical market one has to be aware of the features of

pharmaceutical marketing .

1. You reach the end-consumer(patient) through an intermediate customer(the

physician who prescribes the drug)

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2. Segmentation in pharmaceutical marketing is of two steps

The first step of segmentation is at the consumer level (the patient)

The second is at the consumer level (doctor), whether he is a general

practitioner or a specialist or a hospital doctor he is the influencer.

Patients (consumers or end-users)

Patients with similar illness falling under the same therapeutic group,

eg. asthmatic patients, diabetic patients, tubercular patients etc.

Patients depending on the stage at which the disease is progressing eg

acute or chronic asthma, mild or moderate hypertension.

Patients according to their age groups, eg, Pediatric patients, geriatric

patients etc.

Patients segmented according to gender eg, male and female patients.

Doctors (intermediate-customers, who are influencers

Doctors according to their age group

Doctors according to their specialty eg. surgeons, gynecologists, cardiologists,

pediatricians, dentists etc.

General practitioners who treat mostly patients with a particular

illness, common diseases, minor ailments etc.

Doctors according to their place of practice e.g urban, rural,

govt., Hospitals primary health centers, private nursing homes

etc.

Doctors according to the type of practice eg. prescribing

doctors, Dispensing doctors, etc.

Doctors according to their usage rate eg., heavy users, light

users, non-users, past users etc.

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PHARMACEUTICAL MARKET TRANSACTIONS

PATIENT

GP PRESCRIPTIONS

HOSPITAL DOCTOR

NURSES

PHARMACISTRETAIL CHEMIST

PHARMACISTRETAIL CHEMIST

PATIENT

The Pharmaceutical marketer by using segmentation strategy creatively can

Clearly identify the target group

Focus the promotional effort to maximize gains cost effectively

Create a strong positive product image to offset competition.

MARKET DIMENSIONS

To study the profile of your market, one has to view the market from all possible

dimensions.

The size of the geographical market

State wise or district wise

How much does each state contribute to the All India Market?

What is the rate of change?

Information is needed both in terms of volume, value and the number

of prescriptions generated

The size of the market by therapeutic group

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Therapeutic group wise contribution to pharmaceutical market

in terms of volume, value and the number of prescriptions in

each therapeutic group.

Region wise contribution for each therapeutic group.

The rate of change.

The size of the market by demographics of consumers that is the number of

patients treated with demographic details like age-group, gender, location of

treatment and income ,education levels etc. AND the customers that is doctors

by age-group, gender, location, type of practice, specialty etc.

The size of the Prescription Market that is the number of prescriptions written

in each sub-therapeutic group of the major therapeutic category.

The size of the competition

It is the number of competitors operating in each segment,

region, with their share of the total market, resources, strengths

and weaknesses along with the benefits and promotion offered

by major competitors.

SIZE of the MARKET by VOLUME

The dealer network i.e. the distributors /stockiest and retail

chemists

according to the volume of their purchases like low, medium,

heavy and by location.

The SIZE of the Institutional market

The institutional market by nature, frequency, volume and type

of purchases and by location.

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Do they invite annual tenders or call for periodical rate

contracts?

Which key people are involved in the decision of buying?

What are the selection criteria?

The most important way of segmenting the Pharmaceutical Market is by the various

therapeutic groups. Major therapeutic groups are as follows:

Sr no Therapeutic groups1 Antibiotics

2 Anti peptic ulcerants

3 Cardiac therapy

4 Analgesics

5 Anti diabetic therapy

6 Cough and Cold Preparations

7 Anti rheumatic, Norm-Steriodal Anti Inflamatory

8 Anti Asthamatic therapy

9 Vitamins

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1.3 SWOT ANALYIS

The Indian Pharmaceutical industry today is a leading low cost high quality generic

medicines supplier to the world. Its future growth depends on several aspects of its

strengths, weakness, opportunities and threats

STRENGTHS

1) Strong low cost manufacturing sector

In Comparison to the European and US pharmaceutical industry the Indian pharma

sector has the strength of

a) low wage costs

b) low material costs like the bulk drugs and the chemical intermediaries required

to manufacture the bulk drugs as well as the chemicals that go into the

manufacture of formulations.

c) lower cost of living.

Manufacture of drugs in India is fifty percent cheaper than in the western countries.

The Indian pharmaceutical sector has ten thousand five hundred manufacturers in the

country comprising about three large and medium units and remaining in the small

scale or unorganised sector.

The thrust on generics and the existence of the process patent only in the period 1970

and 2005 helped the small and medium sector to grow enabling India to source more

than eighty five percent of its domestic demand for bulk drugs and drug intermediates.

After liberalization the contribution of the public sector decreased in an increasingly

commodity market. The major two fifty pharmaceutical companies control seventy

percent of the market, while the market leader holds a seven percent market share.

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2) Competitiveness of Indian Generics

The major advantage of the pharma industry is its exports which is maintained by the

increased competitiveness of the industry compared to the developed and regulated

markets which is seen in the vast number of Abbreviated New Drug

Applications(ANDA) and First to File (FTF) fillings for the formulations sector and

Drug Master Files (DMF) fillings for the bulk drugs by the Indian companies in the

USFDA for exports to US market which was US $ three hundred and six billion in

two thousand and nine.

In two thousand and ten more than thirty percent of DMF approvals by USFDA were

from India clearly showing the competitiveness of the Indian pharmaceutical as

compared to other leading generics producers like China, Israel and Germany.

India is estimated to have around four hundred and sixty one Certificate of

Suitability which is about twenty percent of the total granted by European Directorate

of Quality Medicine and the products registered by India vary in complexity and

range of therapeutic areas.

3) Human Skill

Availability of human resources in India has the following:

High knowledge in engineering and science

Highly motivated scientists and lower innovation cost

Huge pool of English speaking employees, which is a comfort zone for

international customers and regulatory agencies.

Low cost scientific pool on the shop floor leading to high quality documentation

and understanding of the process

Service culture for Outsourcing.

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The largest number of USFDA plants outside US are in India. During the last five

years there has been an increasing demand for contract research and clinical trials

from the multinationals

Weakness

1) Low R&D Budget

Even though the India pharmaceutical industry is large by Indian standards, in the

world market its share is only about two and half percent. The investment in

Research and Development by major Indian pharmaceutical companies is about

eight and half percent of their sales turnover, which as a percent of total production

works out to about four and half percent of the total production compared to eight

percent in the developed markets.

In India the emphasis on R&D is more an issue of access to public health

infrastructure and low cost medicines and not a requirement and disease control. The

R&D budget of the total pharmaceutical industry is small compared to the global

competitors.

Thus individuals R&D budgets of many US companies are much more than the

cumulative R&D budgets of all the companies in India. Also the problem of R&D

investment increases due the lack of supportive funding from the government which

has been possible in competing countries like Israel, Malaysia and Singapore.

2) Inadequate Infrastructure

There is a weakness in basic infrastructure like power, roads, and the lack of

advanced labs and infrastructure for drugs testing along with smaller capacities as

compared to countries like China and Israel which have huge capacities resulting in

lower cost of production. The Indian pharmaceutical industry has to develop good

infrastructure for its survival.

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3) Diffused industry structure

Diffuse nature of the Indian pharmaceutical industry where about twenty to thirty

companies are large enough to bear the transaction costs associated with sustained

production including exports considering the stringent compliance entry regulations

of the developed and emerging markets.

4) Poor industry academia interaction

It is observed that there is lack of strong linkages between academics and industry

which is essential for the growth of the industry.

5) Limitations to domestic market size

Limitations in growth of the domestic market size due to constraints of low medical

and healthcare expenditure in the rural areas of the country.

6) Inadequate overseas marketing infrastructure

Indian companies lack in global marketing work force due to constraints of surplus

capital and increasing expenditure cost required to dominate the global markets.

7) Lack of regulatory infrastructure

Delays by the Central Drugs Standards and Control Organisations (CDSO) for

timely clearance for new drug trials, lack of drug inspectors, at the centre and the state

levels in the Food and Drug Administration is a major hindrance in the smooth

growth of the industry.

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OPPORTUNITIES

1) Generics

According to the Mckensey report of the department of Pharmaceuticals US$ Three

hundred billion are expected to go off patent by 2015 for conventional molecules .

Considering factoring for the reduction in price and market value from patent to

generics this is projected to be at least thirty to thirty five percent which works out to

US$ hundred billion.

Compulsory licensing provisions negotiated in the Doha round allows for countries to

import cheaper generics versions of patented drugs in the interest of public health.

Thailand and South Africa having started such initiatives will be beneficial to India.

Historically, small molecule drugs dominated therapeutic areas such as cardiovascular

and central nervous system conditions and contributed to significant growth. Of late

these markets are saturated with me-too drugs and also suffer from rapid market

erosion because of the influx of generic drugs after the patent expirations of key

brands.

At present pharmaceutical companies are shifting their R&D focus toward developing

novel therapies for the treatment of niche indications which should ensure longer-term

growth. Examples of target therapy areas are oncology, immunology, and

inflammation.

The target markets of oncology, immunology, and inflammation will experience the

highest sales growth and become the principal growth drivers for the top 50 pharma

companies totally generating an additional $ forty five billion by 2014

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2) Big Pharma will remain dependent on small molecules, but biologics will spur

growth

Big pharma business was essentially built on small molecule products that are

relatively inexpensive to develop and manufacture, thus allowing companies to

concentrate on fuelling growth along with a aggressive sales and marketing strategy.

But once patent protection is lost, small molecules are easy for generics drugs

companies to manufacture, as they do not have to support big R&D teams and are

able to compete on price.

The commoditization of the small molecule market has forced the Big pharma players

to seek diversification into other areas.

3) India –an attractive destination for Contract Manufacturing Research

With the global pharmaceutical industry at the cross roads and with many of the

block bluster drugs getting off-patented along with increasing R&D costs, companies

have found recourse to outsourcing some of their research and manufacturing

activities and saving cost in the process.

This has lead to the growth of contract research and manufacturing services or

CRAMS making the Indian companies to rejoice. Business of CRAMS has come as a

boon to India taking full advantage of the features enjoyed by India as a country of

diverse origin and strong manufacturing base in pharmaceuticals for many decades

India could capture ten percent of the global CRAMS market of almost US$ twenty

thousand billion by 2012. Overall the CRAMS segment is expected to grow thirty to

thirty five percent per annum on top of a growth of about forty five percent in the

coming years.

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4) Clinical Trials Industry

The pressures of declining R&D output and increasing costs has resulted in the

globalization of clinical research and emerging markets have begun playing a

significant role in the drug development value chain. India too has seen a surge in

clinical research activity and emerging markets like India are a strategic imperative

for good clinical research.

India is one of the fastest growing clinical research destinations with a growth rate

that is two and a half times the overall market growth.

The number of investigators in India has also grown the fastest among Asian, Latin

America and Eastern European countries with a forty five percent CAGR between

2002 and 2008.India has one of the latest subject recruitment rates globally with

screen failure and drop rates lower by nearly fifty percent as compared to global

averages.

India contributes twenty to thirty percent of global enrolment in multi-centric studies

where it is a participant. India is ranked third across all countries after the USA and

China in terms of its overall attractiveness as a “clinical trial” destination according

to a recent AT Kearney global survey.

India‘s clinical research landscape is undergoing a glorious metamorphosis aided bymany uniquely differentiating capabilities, a rapidly transforming health care market

and an enabling environment that is rapidly adopting itself to global standards

The Clinical Establishment (Registration and Regulation ) Act, which is being

implemented by the government to regulate private hospitals and laboratories across

the country , will play a significant role in devising and implementing standards of

facilities/services and further enhance the quality of care provided by the Indian

health care delivery system.

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India has significant valid population to participate in clinical trials and the country

also has proven capabilities in medical skills, hospital beds, and IT capability. This

offers an opportunity to capture the market share in global clinical R&D market such

as clinical trials, data management, testing etc.

Cost of clinical trials in India are about one tenth of their levels in the US.

Currently, India is experiencing a growing number of collaborations between Indian

and foreign firms in the domestic market, especially involving the biotechnology

sector, in a wide variety of areas such as collaborative R&D including drug

discovery and clinical trials.

5) IT in Pharma R&D

There has been a growing importance of IT in the pharma sector. Although pharma

industry is a life saving products and health care industry it has been a slow and late

implementer of IT tools. Use of IT can help in

1)Data analysis for molecular screening

2)Clinical research data management(CDM)

3)Animal modeling

4)Biomarkers for safety and effectiveness

5)Bio-statistics

6)Bio-informatics

7)Genome research

8)Process implementation in terms of enterprise resource planning,

regulatory submission.

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THREATS:

1) Formulations Sector

The generics market in developed countries is being currently affected by a

number of factors;

a) Growing strategy of MNCs to protect market loss due to expiry of

patents

b) Increased competition to countries like India from manufacturers in

China and East Europe not only from the manufacturing point of view

but also barriers being raised by them to protect and develop local

industry, which is being done by such processes as long approval time

and costs for registration of drugs.

Insistence on completing long process for registration for drugs

registered earlier by way of specific requirements of fresh clinical trials.

c) Key markets like the United States are entering into a number of Free

Trade Agreements with different countries with intent to contain Indian

exports

d) Prevention from bidding for government contracts as US permits bidders

only from countries that are signatories to WTO Agreement on

Government Procurement.

e) Submission of separate state level applications for marketing drugs in

the United States as there is no nation wide system of application even

where Food and Drug Administration approval has been received.

(2) Bulk drug industry

Stiff competition from China on the costs front has led to the Indian Bulk

Industry particularly the Fermentation Industry to a stage of closure due

to various factors including subsidized power and finance costs in the

computing country. As a result no company in India is manufacturing

antibiotics like Penicillin and Erythromycin etc.

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1.4 NON-STEROIDAL ANTI-INFLAMMATORY DRUGS (NSAID‟S)

Anti-inflammatory drugs are used to reduce inflammation and pain. This class of

drugs is used clinically in the treatment of musculo skeletal disorders such as

rheumatoid arthritis, osteo arthritis , ankylosing spondylitis, headache, sports injuries,

and menstrual cramps. These drugs are also employed as analgesics against ―PAIN‖

Prostaglandins are a family of chemicals that are produced by the cells of the body

and have several important functions. The promote inflammation, pain, and fever

support the blood clotting function of platelets, and protect the lining of the stomach

from the damaging effects of acid .

Prostaglandins are produced within the body‘s cells by the enzyme cycloxygenase(COX). There are two COX enzymes COX 1 and COX 2. Both enzymes produce

prostaglandins that promote inflammation, pain, and fever. However the COX 1

produces prostaglandins that supports platelets and protect the stomach.

NSAID‘S block the COX enzymes and reduce prostaglandins throughout the body.As a consequence ongoing inflammation, pain, and fever are reduced.

TREATMENT OF INFLAMMATION:

1) INFLAMMATION PROCESS:

Inflammation is a rational response of tissues to any kind of insult they suffer. It is

a complex action on the part of tissue affected involving series of cellular and

vascular changes.

All the phenomena observed right from the time of insult to the time of either

complete repair or death of the tissue from the process of inflammation can be defined

as a natural and complex series of cellular and vascular responses

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(a)The insult tissue might encounter can be from

(i) physical agents like nail, thorn, electrical shock, fire, or even surgeons

Knife or radiation from X-ray therapy or in space flight

(ii) chemical agents like acids, alkalies, drugs ingested or inhaled or

biological agents like microorganisms causing infection.

The five cardinal signs of inflammation are

Ruber (redness)

Dolors (Pain)

Calore (Rise of temperature locally)

Tumore( Swelling )

Functionlaesa (loss of function)

(b) The natural purpose of inflammatory process is

(i) to hold in check the extension of injurious effects of the insulating

agent on body tissues

(ii) to hold in check the degree of damage to the tissues affected by the

insulating agent and those involved in this process.

(iii) to remove and destroy the insulating agents

Thus inflammatory process is part of protective phenomenon. It may however cause

more damage to the tissue than the direct effect of the causative agent. It is here

where the rationality of anti-inflammatory drugs comes into play.

ANTIINFLAMMATORY AGENTS:

The basic purpose of inflammatory process is to reestablish at the end, the normalcy

of the tissue attacked. It is to this end that the anti-inflammatory therapy should be

aimed. Thus anti-inflammatory drugs can help by

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a) reducing vasodilation and there from the resultant edema, which is a normal

immediate response to the injury.

b) reducing connective tissue proliferation which is normal long term response to

injury.

c) reducing the undesirable symptoms of the underlying disease.

ANTIINFLAMMATORY THERAPY:

The inflammatory response is based upon the controlled interplay of numerous

functions and performances of the cells and tissues involved. The individual

mechanism of this response may get modified quantitatively and occasionally even

qualitatively. An essential aspect of this reaction is its apparent tendency to

reestablish the status quo i.e. the equilibrium of normal tissue.

The aim of anti-inflammatory therapy is to favour this process of recovery by

influencing partially the functions as well as regulatory mechanism. The various

physio-pathological processes concerned with the anti-inflammatory response offer

many points of impact as to the anti-inflammatory so that there is some justification in

ascribing the therapeutic efficacy of these agents to the peripheral action within

the inflammatory focus.

As is evident from clinical experience it is possible to obtain considerable

improvement and even recovery in inflammatory conditions by a drug

induced inhibition of the inflammatory response.

Anti-inflammatory drugs have actually been developed to do any of the

following:

Reduce vasodilation (erythema) and edema the immediate short term response

to injury

Reduce connective tissue proliferation the normal long term (repair) response

to injury.

Reduce the undesirable symptoms of the underlying disease.

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The following are the fast moving anti-inflammatory drugs in the pharmaceutical

market.

1) IBUPROFEN

Ibuprofen is the first drug of the propionic acid derivatives that was permitted for

clinical trials.

Ibuprofen exhibits analgesic, fever reducing and anti-inflammatory action

It is used in treating rheumatoid arthritis, in various forms of articular and non-

articular rheumatoid arthritis, as well as pain resulting from inflammatory peripheral

nerve system involvement, nueralgia, myalgia, ankylosing spondylitis, inflammatory

diseases of the ENT organs, adnexitis, dysmenorrhea, and for headaches and

toothaches.

Ibuprofen is 2-(4-iso-butylphenyl) propionic acid and is synthesized by the

chloromethylation of iso-butylbenzene giving 4-iso-butylbenzylchloride.

This product is reacted with sodium cyanide making 4-iso-butylbenzyl cyanide which

is alkylated in the presence of sodium amide by methyl iodide into 2-( 4 - iso-

butylbenzyl) propionitrile . Hydrolysis of this resulting product in the presence of a

base produces Ibuprofen

2) NAPROXEN

It also belongs to the class of propionic acid derivatives.

Naproxen exhibits analgesic, fever reducing , and long lasting anti-inflammatory

action. It causes reduction and removal of painful symptoms including joint pain,

stiffness and swelling in the joints.

Naproxen is 2-(6 methoxy -2-naphthyl) propionic acid and it can be synthesized

from 2-acetylor 2-chloromethyl-6-methoxynaphthalene.

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3) DICLOFENAC

It belongs to the class of acetic acid derivatives that are widely used as anti-

inflammatory, analgesic, and fever reducing compounds.

Diclofenac is 2-((2,6-dichlorophenyl)-amino)-phenyl acetic acid and is synthesized

from 2-chlorobenzoic acid and 2,6-dichloroaniline. The reaction of these in the

presence of sodium hydroxide and copper gives N-(2,6-dichloro phenyl) anthranylic

acid, the carboxylic group of which undergoes reduction by lithium aluminum

hydride. The resulting 2-((2,6-dichlorophenyl)-amino)-benzyl alcohol undergoes

further chlorination by thionyl chloride into 2-((2,6dichloro phenyl)-amino)-

benzylchloride and further upon reaction with sodium cyanide converts into 2-((2,6-

dicholorphenyl)-amino)benzyl cyanide. Hydrolysis of the nitrile group leads to

diclofenac.

Diclofenac is used in acute rheumatism, rheumatoid arthritis, osteoarthritis

ankylosing spondylitis ,arthrosis,back pain,neuralgia,and myalgia.

4) MEFENAMIC ACID

It belongs to the class of Anthranylic acid derivatives.

Mefenamic acid, N-(2,3xylyl)anthranilic acid is synthesized by the reaction of the

potassium salt of 2 –bromobenzoic acid with 2,3-dimethylaniline in the presence of

copper acetate.

It is mainly used for moderate pain and dysmenorrhea.

5) PIROXICAM

It belongs to the class of Oxicames,whose mechanism of action are most likely the

supression of prostaglandin synthesis.

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Piroxicam is 1,1-dioxid-4-hydroxy-2methyl-N-2-pyradyl-2H-1,2-benzo

thiazine-3-carboxamide

Piroxicam is synthesized by reaction of a 3 carboxylic acid ester(methyl ester)

with 2 Amino pyridine.

It is used in acute rheumatism, osteoarthritis, back pain neuralgia, and myalgia.

6) NIMESULIDE

It is a relatively COX-2 selective nonsteroidal antiinflammatory drug with analgesic and

antipyretic properties.

Its approved indications are in the treatment of acute pain, the symptomatic treatment of

osteoarthritis and primary dysmenorrhea in adults.

It has a multifactorial mode of action and is characterized by a fast onset of action.

Nimesulide is 4 Nitro 2 phenoxy methane sulphonanilide.

Its synthesis involves chlorintation of benzene using aluminum chloride to ortho and para

chloro benzene ,nitration using nitric acid and sulphuric acid and seperation of ortho

chlorobenzene which is treated with phenol and caustic potash the resultant product

obtained is reduced with hydrogen in presence of palladium to give methane sulfonic

anhydride which on nitration with nitric acid in the presence of glacial acetic acid gives

Nimesulide.

7) LORNOXICAM

It is a non steroidal antiinflammatory drug of the oxicam class with analgesic,

antiinflammatory ,antipyretic properties. It is available in oral and parenteral formulations.

Lornoxicam is used for the treatment of various types of pain especially resulting

from inflammatory diseases of the joints, osteoarthritis, sciatica, and other inflammations.

Lornoxicam is 4 hydroxy -3methyl-2H-thiene 1,2thiazine -2methyl 1-1dioxide

carboxylate

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