INDIACIS PHARMA

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INDIA-CIS PHARMA HEALTH CONFERENCE MUMBAI3rd
MARCH, 2006

• Department of Chemicals Petrochemicals
• Ministry of Chemicals Fertilizers
• Government of India

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Agenda

• India Overview of the Country
• Indian Pharmaceutical Industry
• Indias Strengths in Pharma Sector
• Status of Pharma Exports to CIS

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India Overview of the Country
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India Largest democracy in the world

• Gained independence in 1947
• Current population over 1 billion
• English is the language of business
• 4th largest economy globally on PPP basis
• 6th largest energy consumer
• Predicted by Goldman Sachs to be the 3rd largest
  economy in the world by 2050

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India finds harmony Even with all its diversity

• 29 states 6 UTs with 22 official languages
• 3.3 million square kilometers area
• Religions 81 Hindus, 12 Muslims, remaining are
  Christians, Sikhs, Jains, Buddhists, Parsis, Jews
• Per capita income US 750
• GDP US 650 billion

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INDIA RISING
Some Indicators

• GDP growth rate 8.1 (twice that of USA UK)
• Manufacturing sector growth rate 9.4
• Exports growth rate 23 ( compounded growth rate
  over last 10 years)
• Inflation Rate - 4.1 (5 a year ago)
• Credit growth- 25 (22 last year)
• Foreign Exchange Reserve - US 142 billion
  (1991-US 5.8 billion)

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Capital Market

• Equity Index at the highest level ever close to
  10500 (BSE)
• Indias market capitalisation US 550 billion
• Registered FIIs 667
• This Years flow of portfolio investment- US 10
  billion
• Volume of public issues rose by 5 times in 2005
• Introduction of book-building process

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RECENT FISCAL REFORMS

• Income Tax simplified - 10, 20 and 30 rates
• Corporate Tax rate - Reduced to 30 from 35
• Peak Import Duty on non-agricultural items
  reduced from 15 to 12.5
• Import duty on specified Capital Goods
  (including those for Pharma biotech. Sector) -
  5
• Import duty on IT items (217) Nil
• State Value Added Tax - introduced w.e.f. 1st
  April 2005 (4 rate for pharma)

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Some of the worlds best academic and healthcare
institutes are in India

• 14,000 hospitals
• 700,000 hospital beds (85 urban)
• More than 500,000 doctors
• 737,000 nurses
• 171 medical colleges
• 17,000 medical graduates/year (MBBS/MD)
• 300 life sciences colleges produce over 700,000
  graduates annually

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Indian Pharmaceutical Industry
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Indian Pharma Industry Profile

• Number of companies
• Large 300
• SMEs 6000
• According to Mckinsey Co., Indian pharma market
  to be US 25 billion by 2010, out of which US 11
  billion to be domestic sales
• PHARMEXCIL formed to facilitate exports of
  pharmaceuticals and related matters-plan to set
  up warehouse facility in Russia

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Indian Pharma Industry Profile contd.

• Worth US 8 billion globally 4 in volume,
  13 in value
• Exports of US 3.7 billion in FY 2004, increasing
  _at_ 22.9 CAGR 1994-2003 years.
• India among top-5 bulk manufacturers and top-20
  exporters world-wide
• India now files highest number of DMFs
• India has largest number of US FDA approved
  plants outside US.( 75 now)
• US Pharmacoepia INDIA office opened at Hyderabad
  -first such office ouside USA
• Domestic market growing at 8-10 p.a.
• RD spending to increase from 5 of sales to 8
  by 2007

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India The Pharma Outsourcing Hub

• India emerging as the hub for
• Collaborative contract research
• Contract manufacturing
• Co-development
• Co-marketing
• Cost of developing an NCE over US 1 billion
  whereas, in India it can be as less as US 50
  million
• Several MNCs like Pfizer, Merck, GSK, Roche,
  Bayer, Aventis, etc. making India a hub for APIs
  and bulk supplies
• Pfizer, Eli Lilly, Novartis carrying out clinical
  trials in India

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India The Pharma Outsourcing Hub contd.

• Several CROs (about 22) like Quintiles, Simbee,
  RCC, Omnicare, etc. set up liaison/marketing
  offices in India
• Indian CROs commenced trials since 1996
• Cos. like GSK Biological lined up global trial of
  4 vaccines in India during 2005. Also clinical
  RD for AIDS, dengue, malaria, TB vaccines

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Regulatory Framework

• Drugs and Cosmetics Act, 1940 a Central Act to
  regulate manufacture/ import/sale of drugs
• New drugs, imports, clinical trials, drug
  standards approved by Central Govt. Enforcement
  by States
• Drug (Price Control) Order, 1995 for control of
  prices of specified drugs
• Indian Patents Act, 1970 As on 1st January,
  2005 provides product patent for drugs, food and
  agro-chemicals

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Some Recent Changes in Drugs Cosmetics Act and
Rules

• Schedule Y amended for multi-centric concurrent
  clinical trials as per GCP
• GMP realigned as per international guidelines
  (particularly WHO OECD)
• GCP Indias requirements on GCP published as
  guidelines
• GLP monitoring authority set up for
  pre-clinical (toxicological) studies
• Registration system streamlined for import of
  drugs both site and product registration

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Process Patents for pharmaceuticals introduced in
1970

• Prior to 1970
• 85 market with foreign companies
• 15 market with domestic companies
• 1970 Process Patent introduced for
  pharmaceuticals
• At present
• 85 market with domestic companies
• 15 market with foreign companies

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Indias Strengths in Pharma Sector
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Indian Pharma Industry Strengths - Policies

• Product Patent regime in effect from January 1,
  2005
• Pro-business, Pro-IP Government federal, state
  city
• India bio/pharma clusters make it easy to set-up
  and conduct business
• Effective Check on spurious drugs- new law being
  made

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Indian Pharma Industry Strengths -
Infrastructure

• Rich bio-diversity
• Well-developed pharmaceutical, chemical
  healthcare industries
• Complex capabilities in research, synthesis
  manufacturing
• Quality conscious (cGMP, GLP, ISO)
• CSIR World renowned 42 national research
  laboratories
• Huge patient population
• Information technology core competence

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Indian Pharma Industry Strengths - Cost

• Cheaper labour (cost to hire a Ph.D. scientist
  US 25K as against US 65K/year in the US)
• Employers receive loyalty, respect, dedication
  admiration from employees
• 40 cheaper to set up a plant in India than in
  the US/EU
• 35-40 cost savings for conducting clinical
  trials in India
• Funds available for expansion and start-ups

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Indian Pharma Industry Strengths - Talent

• Huge pool of experienced scientific manpower
  fluent in English
• Employees work 6 days/week are willing to work
  in all shifts
• Reverse brain-drain Non-resident Indian
  scientific personnel moving back
• New breed of managers (no longer family-run
  businesses
• Strong entrepreneural nature Competition

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India is a proven source of quality and
cost-effective pharma materials

• Fine chemicals
• Intermediates
• Advanced intermediates
• APIs (Active Pharmaceutical Ingredients)
• Formulations

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Highest number of US FDA approved Plants outside
the US are in India
SourceFDA Proximare
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Indians filed the highest number of DMFs 871
growth since 1987
SourceFDA Proximare
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Status of Pharma Exports to CIS COUNTRIES
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Exports of Drugs, Pharmaceuticals, and Fine
ChemicalsMajor Destinations in CIS
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India worlds supplier of ARV drugs (Anti-
HIV/AIDS)

• About 50 of the ARV drugs being exported to
  developing countries from India substantial
  exports to Africa
• Indian companies instrumental in drastic
  reduction in ARV drug prices from over US 10,000
  per head/annum to US 150 per head/annum

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CIS PHARMA MARKET (INCLUDING RUSSIA)

• US 7 billion - Share of Indian exports only 3 to
  4 (aroud 275 million) - Great scope to
  enhance exports from India
• India can help CIS to meet their health care
  needs in a cost effective manner and cater to
  larger section of population
• Joint Ventures possible provided certain issues
  like convertibility to dollar mode are sorted out
  in some countries
• Fast track registeration for Indian medicines
  would be helpful

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Areas for India-CIS collaboration

• Sourcing of APIs formulations from India
• Collaborations for manufacturing marketing of
  drugs-Indian companies are very strong in all
  therapeutic groups especially in diabetic ,
  respiratory, neuro, antiinfective and
  cardiovascular groups and they can meet the
  requirements of CIS countries in a cost effective
  manner
• Joint RD work for pharmaceuticals
• Training of drug regulators at NIPER
• Cooperation for use of various testing facilities
  at NIPER with respect to quality control/quality
  assurance, bio-availability , impurity profiling
  ,toxicology etc.
• Participation in INDIACHEM 2006 in Mumbai from
  8-10 November, 2006

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The Indian Government and Industry would welcome
partnerships with CIS countries in providing
access to affordable, quality medicines
Conclusion
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Thank You !