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CRITICAL ISSUES BEFORE PHARMA INDUSTRY
All countries have adopted controls over the introduction of new products. In many countries, including India, there are measures to control drug prices too. Given the complex nature of production, marketing and regulatory frame work, a variety of actors play different roles from pre-production stage to the point where the products reach the final consumer. The regulatory environment of the pharma industry is being overhauled rapidly to make it TRIPs and GMP compliant. In the highly protected, pre-liberalization era price was the major competitive weapon.
Given the fact that a large number of drugs go off patent in the coming two to three years, many multinationals and large Indian companies are likely to enter the generic markets in the hinterlands to reap profits driven by high volume sales. Their major targets, apart from the scores of rural customers, would be the small and medium sized hospitals, health institutions and medical practitioners. It must be remembered that generic sales do not require massive promotional expenses, which can bring the prices down to competitive levels.
The emerging business environment demands strict maintenance of quality standards - not in terms of a simple analysis of the final product for compliance to their labeled claims, but in terms of total over their procedural parameters.
TRIPs: There exists lack of clarity and, hence, unanimity regarding the implications of TRIPs. The views and stance taken by the industry and various industry associations have varied as much as their perception about the actual modus operandi of implementation of the regulation.
As for the government, it has definitely initiated a movement effected through the Patents Amendment Act, 1999 and the foreign firms have started registering patents. The 'D-day' has arrived on January 1, 2005. The big firms have understood its implications and so do the government. There is already a serious move on 'R & D' in front - Rs. 150 crore R & D fund has been created by the government for Pharma. Big and medium pharma units have moved in their R & D efforts, however, small pharma units have not been sensitized.
WHO - GMP: Issues relating to WHO-GMP compliance have been a relatively major area of concern for the industry as a whole. Here the primary affected group is of small firms. The large firms and majority of the medium firms have already graduated to the "desired" level of quality. The emerging regulatory trend is a movement towards stricter quality norms as described in previous chapter. WHO-GMP guidelines cover comprehensively the entire process of manufacturing right from the entry of raw material till the exit of final products into the supply chain, involving areas like documentation, personnel, material, infrastructure and management.
Two main objectives of WHO-GMP are to prevent contamination and ensure the reproducible quality of drugs, by controlling all variables.
Interestingly, apart from regulatory compliance, the industry feels that this is also gradually becoming a demand from the market. The international quality norms especially those related to exports is also a major area of concern. This has four related dimensions (a) Importing nations and bulk purchasers are gradually demanding higher quality standards, e.g. WHO-GMP. (b) Secondly, importing nations have different registration procedure and documenting norms for import. (c) Thirdly the quantity of imports is not always manageable by a single small firm. (d) Fourthly, the small firms individually cannot afford to offer a basket of different formulations and or dosage forms at internationally competitive prices.
SWOT ANALYSIS: Indian pharma sector is at critical crossroad where key decisions by them and the government will set the direction and chart the course for the sector for the first quarter of the new century. Hence it is fruitful to do SWOT analysis at this juncture and identify strengths, weakness, opportunities and threats so that something can be done to claim a well deserved larger share of the global pharma market.
SWOT analysis focuses on the internal and external environment, examining strength and weaknesses in the internal environment and opportunities and threats from external.
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