Jerri-Lynn here. The key role Indian pharma plays in ensuring access to low-cost drugs for developing countries is especially important during the age of COVID-19, when big pharma is doing its best to promote high-cost, proprietary vaccines and treatments, regardless of their lack of history and questionable efficacy. Research into using low-cost generics is not part of the game plan. And the price of drugs is not just a concern for developing countries and is also not just limited to the pandemic,
By Thankom Arun, Professor of Global Development and Accountability, University of Essex, and Reji Joseph, Associate Professor of Economics, Institute for Studies in Industrial Development. Originally published at The Conversation.
India’s pharmaceutical industry is renowned for selling medicines to the world at reasonable prices, especially developing countries. This has helped Africa in its fight against HIV/Aids, for instance. Such endeavours have earned India a reputation as the “pharmacy of the world”.
Now, the advantages that have enabled India to play this role are in danger of being eroded. Not only would this be bad news for India’s economy, it could make it harder for developing countries to access the medicines they need – threatening the UN Sustainable Development Goals in the process.
India is the world leader in generic medicines, which contain the same ingredients as the originator version, and go on the market after the original patent has expired. 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 in recent years. Indian companies have managed to turn this into an opportunity by using these ingredients to supply medicines at reasonable prices while reducing their production costs and R&D spend.
But China is also expanding into drug formulations. 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%. Remarkably, 36% of China’s exports are to the EU and North America, where regulations are the most stringent, compared to 19% in 2009. Beijing’s “Made in China 2025” policy has identified pharmaceuticals as one of its strategic industries.
China’s rising share of formulations has been aided by improved standards that appear to be making the world less apprehensiveabout Chinese medicine quality. Notably, the China Food and Drug Administration issued guidelines in 2013 to make generic medicines bioequivalent to the originals, and in 2016, the government made them mandatory.
Chinese pharma has also placed much emphasis on using AI and genetics for developing new drugs. This enables firms like XtaIPi to identify thousands of molecules which could be used to treat a disease with fewer resources and time.
One silver lining is that China is proposing a new regulation that would give its firms exclusive control over their clinical test data. This sort of rule is favoured by the “innovator” pharma industries that we see in the west, and is opposed by generic pharma industries like India’s. It indicates where Chinese pharma might be headed, and may drive up its production costs for formulations – thus potentially benefiting India.
Another challenge to India is wealthy countries protecting their pharma industries to ensure drug security. In August, President Trump issued an executive order that called for the elimination of drug imports, both as active ingredients and formulations. France and Germany look to be 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.
Access to the US market is also critical for leading firms to maintain profit margins. For example, when Dr Reddy’s secured 180-day exclusivity in the US for selling the antidepressant fluoxetine 40mg in 2001-02, it increased the company’s annual sales of generic drugs by 81% and operating profits by 50%.
The COVID dimension
COVID-19 underlines India’s importance to developing countries when it comes to drug access. The Serum Institute of India (SII), the world’s largest vaccines producer, is collaborating with the World Health Organization, the COVAX facility of Global Alliance for Vaccines and Immunisation (GAVI), and the Coalition for Epidemic Preparedness Innovations (CEPI) to produce and supply 100 million doses of a COVID-19 vaccine at a maximum cost of US$3 per dose.
This is the lowest quoted price in the world for a COVID vaccine, and will see them distributed in low and middle-income countries. By comparison, German biotech firm BioNTech’s deal with US involves a price of US$19.50 per dose, while the Moderna/US deal is set at between US$32 and US$37 per dose.
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. The drug is in phase III trials in India at the moment.
SII is also partnering with US firm Novavax to develop and distribute the NVX-CoV2373 vaccine in collaboration with CEPI and COVAX. Again, this involves a minimum of one billion doses for India and other low to middle income countries.
Several other COVID vaccine candidates are being developed by Indian pharma firms: Covaxin, being developed jointly by Bharat Biotech and the Indian Council of Medical Research, has just entered phase III; and ZyCoV-D, by Zudus Cadila, is in phase II. These too are likely to be much cheaper than western equivalents.
Besides vaccines, Indian firms are developing drugs for treating COVID conditions. Baladol, developed by PNB Vesper Life Sciences, has become the first new drug for treating COVID to enter phase II clinical trials around the world. Studies so far have shown that it reduces death rates by 80% – whereas WHO-approved medication dexamethasone reduces them by 20%.
Despite 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.
Contrast this with China, which is reportedly using its own vaccine projects as a commercial negotiating tool with countries who stand to benefit. This threatens to put pressure on countries whose leverage was limited already. It is another reason why India’s position as pharmacy of the world has a value far beyond its borders.
I wonder how well the executive order banning drug imports has been thought through? I recall reading i think it was here, link to fairly reliable sources (WSJ my guess from memory), that large % of drug ingredients sold in USA by pharma as “made in usa” actually came from plants in India. How fast can pharma ramp up US production- and of cours, big price increases will be needed…
Bottom line is medicine for profit is crazy
As an experiment, go down to your local street corner and by a rock of crack cocaine. Now go on the internet to the part of the world where HCQ has been safety tested and sold over the counter for decades. Order it and watch it never arrive as it has been seized by US customs in order to protect the profitability of future vaccines.
Which drug is easiest to obtain, crack cocaine, HCQ, or untested and non existent vaccines?
‘Despite India’s contribution to global access to medicines, the government has never tried to use this as an instrument of foreign policy.’
Contrast this with the goodwill that besieged Cuba has won exporting medical doctors and staff around the world where they are needed. if India throws away its position of being the pharmacy of the world, I am sure that China would gladly step in and fill that void.
Kind of amazing how much more effective sending medical doctors and staff as a political “weapon” is than sending napalm and wedding party assassin drones.
I still have to blame little Georgie Bush for changing our Economic system to a Service Economy. I also blame the Dems for going along with shipping EVERYTHING off shore. There are so many things that have been done that are unforgivable that both the Right and Left have brought about. They simply pretend opposition for the masses, but really could not give a shit about this country. Then they will preach on tv how they love the country and its people, are being resistance, and all sorts of Punch, and Judy shows. It is a very sad situation when a Country has fallen to its knees and cannot even produce medicines to save itself.
We can thank Nixon for opening the floodgates to “globalization”, AKA get cheap products from China in the place of US made goods. One by one, manufacturing operations were moved off shore to the detriment of US workers. Clinton further hastened this by signing NAFTA. Nowadays, it’s next to impossible to find anything in the stores that have the made in USA label. The big corporations make a heftier margin by farming out manufacturing to China – department, hardware, office supply stores, pharmas are big players in this dirty game. Auto manufacturing is no exception either because most parts are foreign made. Yet, Ford is now running commercials claiming that their autos are made in the US. Most products that are imported are inferior in quality to former US made equivalents and have to be replaced sooner.
Yes, medicines and other emergency goods should not be dependent on globalization…the less dependent the better. Anything can disrupt supply chains.
I’m so sick of brain-dead, globalization jingoism. I really want to puke over all its proponents.
Global cooperation? Sure. There are some benefits, but all tied-up past that is a recipe for exploitation.
To add to what you (thoughtful person) are saying, it has been reported elsewhere that China accounted for 95% of US imports of ibuprofen, 91% of US imports of hydrocortisone, 70% of US imports of acetaminophen, 40% to 45% of US imports of penicillin and 40% of US imports of heparin, based on US Commerce Department data. Rosemary Gibson, a senior adviser with the Hastings Center bioethics research institute was quoted (in the Washington Times, March 17,2020) that “Right now we virtually have no capacity in the USA to make even basic drugs for treating coronavirus, or antibiotics that may come with it, including bronchitis or pneumonia.”
The USA can’t even manufacture a simple thing like a N95 mask in quantity in spite of having a US company (3M) holding the original patent rights. So why should one think that it could manufacture pharmaceutical drugs?
From what I’ve been told, many Made In USA drugs are shipped from India and Israel in fifty gallon barrels. Upon arriving they are bottled into appropriately labeled packaging, the price increased by 500 or 1000%. and thus become “Made in USA”.
I like it. The proposition is that the US can keep drugs made in other countries out of the US.
That’s worked well .
The drug companies and the regulating agencies working for them (not for the people, who pay their salaries) comprise a criminal racket.
Case in point: in India I can buy insulin solution 10 ml for around $5. Here it costs 50 to 100 times as much. People lose legs, lose sensation, go blind, lose their kidneys and die to support these criminals in the style they think they deserve. What they really merit is prolonged agonizing televised death on gibbets in a desert in summer time.