India known to be the leader in the world for Generic formulations/medicines is facing numerous challenges during this pandemic time. The reason being the Chinese nation and other varied factors. India’s top pharma firms include Cipla, Aurobindo Pharma, Lupin, Dr. Reddy’s Laboratories, and Sun Pharmaceutical Industries.
One challenge is coming from China, which has increasingly been exporting active pharmaceutical ingredients (APIs). However, Indian companies did manage to turn this into an opportunity by using these ingredients to supply medicines at fair prices while cutting down the production as well as R&D costs.
China is now also stretching itself into the drug formulations zone. By our calculations, China’s global share of formulations exports trebled from 0.4% in 2009 to 1.2% in 2018, while India’s doubled over the same period from 1.5% to 3.6%. Exceptionally, 36% of China’s exports are to the European Union (EU) and North America, where regulations are most strict, precise, and exacting, compared to 19% in 2009. Beijing’s “Made in China 2025” policy has identified pharmaceuticals as one of its judicious industries. Also, the China Food and Drug Administration (China-FDA) issued guidelines in 2013 to make generic medicines bioequivalent to the originals, and in 2016, the Government of China made them compulsory.
Chinese pharma has also placed special importance on using AI and genetics for developing new drugs. This enables firms like XtalPi Inc. – (a pharmaceutical technology company) to identify thousands of molecules that could be used to treat a disease with fewer resources and time.
Another challenge to India’s generic pharma sector is from wealthy countries. These countries are now protecting their pharma industries to ensure drug security. In August 2020, post US President Donald Trump issued an executive order that called for the elimination of drug imports, both as active ingredients and formulations. France and Germany are too heading in a similar direction. If the US order is strictly adhered to, it will heavily affect Indian pharma. More than half of India’s pharma sales are from exports, and by our calculations, the US has bought 37% of them over the past three years.
Covid-19 pandemic has already underlined India’s importance to developing countries when it comes to drug access. The new collaboration between Serum Institute of India (SII), the world’s largest vaccine manufacturer by volume, Gavi, the Vaccine Alliance, and the Bill & Melinda Gates Foundation will accelerate the manufacture and delivery of up to 100 million doses of COVID-19 vaccines for low- and middle-income countries (LMICs) as part of the Gavi COVAX AMC, a mechanism within the COVAX Facility.
Serum Institute of India (SII) separately has a manufacturing agreement with AstraZeneca to produce one billion doses of the Covishield vaccine, which the UK company is developing with the University of Oxford. Currently in phase 3 trials in India. SII is also partnering with US firm Novavax to develop and distribute the NVX-CoV2373 vaccine in collaboration with the Coalition for Epidemic Preparedness Innovations and COVAX. Again, this involves a minimum of one billion doses for India and other low to middle-income countries.
Moreover, several other coronavirus vaccines are being developed by Indian pharma firms: Covaxin, being developed jointly by Bharat Biotech and the Indian Council of Medical Research (ICMR), has just entered phase 3, and ZyCoV-D, by Zudus Cadila, is in phase 2. These too are likely to be much cheaper than western equivalents.
In spite of India’s contribution to global access to medicines, the government has never tried to use this as an instrument of foreign policy. All decisions on export destinations and pricing have been made by the firms.