It is often said that India is a land of paradox; the country’s healthcare landscape, particularly as it relates to prescription medicines, is no exception. With a population of 1.2 billion and a fast-growing healthcare sector, India appears to be an attractive pharmaceutical market, ranking in the top three globally in volume and in the top 10 in sales. However, gaining market access and reimbursement for innovative medicines in India has long been viewed as a challenge by the pharmaceutical industry, and for good reason.
Despite, or perhaps because of its large size, India possesses significant health-system challenges including an underdeveloped, understaffed and underfunded public system and a recently emerging private system with high out-of-pocket costs for patients. Furthermore, India’s patent laws strictly limit the protection of medicines whose active ingredients are already known. As a result, branded generics currently make up the lion’s share of the Indian pharmaceutical market.
Entering such a unique market is a difficult proposition. However, rising incomes and life expectancies coupled with increasing rates of diabetes, cardiovascular disease and other chronic conditions have created growing need for innovative therapies in the country.
India’s Payer Stakeholders
- Individuals are the most important payers in Indian healthcare. Only 5 percent of Indians have any form of health insurance, so the vast majority of healthcare costs, around 85 percent, are paid out of pocket.
- The Government instituted a draft National Health Policy intended to provide universal healthcare coverage in 2015, but the efforts has so far been unsuccessful. Programmes such as the Rashtriya Swasthya Bima Yojna – Comprehensive Health Insurance Scheme (RSBY – CHIS) seek to expand health insurance to more Indian citizens living below the poverty line, while others like the Employment State Insurance Scheme provide insurance to additional segments of the population.
- Because individuals bear the burden of healthcare costs, and with 180 million Inidan’s living on less than $2.00 USD per day, the government has turned to strict pricing controls. The National Pharmaceutical Pricing Authority (NPPA) was established in 1997 by India’s central government to ensure equitable distribution and availability of medicines at fair prices. The NPPA enforces the government’s Drug Price Control Orders, which determines ceiling prices for “essential and life-saving medicines.” The most recent Drug Price Control Order, DPCO-13, was issued on 15 May, 2013, and put 348 medicines under the purview of price control.
Important Points to Keep in Mind
- The drug approval process in India is straightforward. The manufacturer or importer of the medicine applies to the Drug Controller General of India for marketing authorisation. Following inspection and approval of a drug’s safety, a report is prepared and a license is granted. Though it may be simple to enter the market, receiving exclusivity is a more difficult task.
- Certain HIV/AIDS, tuberculosis, cardiovascular and diabetes drugs are not on India’s National List of Essential Medicines, and therefore are not subject to the government-determined ceiling prices.
- To combat a lacking public infrastructure (as of 2014, there were only nine public system hospital beds per 10,000 people), the Indian Government plans to increase total public health investment from 1.1 percent of GDP in 2012 to 2-3 percent over the next five years. This will improve public healthcare services, and make hospitals and clinics more available to those who cannot afford private healthcare.
Why Generics Matter in India:
- 75 percent of India’s population lives in rural areas, and nearly 400 million people live on less than $1.25 USD per day. Infant and maternal mortality rates are unacceptably high, and 44 percent of children are malnourished. To deal with these challenges, the Indian government has gained a degree of infamy for invoking Compulsory Licensing provisions under the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (WTO TRIPS) agreement to allow generic production of medicines, often contrary to conventional patent protections.
- Owing to its complex patent restrictions, branded generics make up 70-80 percent of all drugs sold in India. Unless a product contains a completely new molecule, it is unlikely to receive patent protection. Roche and Novartis have been engaged in years-long court battles over intellectual property rights for their oncology drugs Tarceva (erlotinib) and Gleevec (imatinib mesylate) against generic versions manufactured by local players, including Glenmark and Dr. Reddy’s.
- Biosimilars are entering the fray in India, as well. From December 2014 to January 2016, at least ten new Indian-made biosimilar treatments were launched or entered clinical trials. Local manufacturers such as Sun Pharmaceuticals are now extending their reach globally in an attempt to compete with leading patented biologics.
- Biosimilars can only be considered against an authorised reference biologic that has been approved in India. If no reference is marketed in India, the product must be licensed and marketed in another country for at least four years, with significant safety and efficacy data prior to authorisation in India.
Implications for Industry
The Indian reimbursement landscape is complex and challenging. Innovation that is rewarded with exclusivity in other parts of the world is often replicated by generics companies, making it a difficult environment for branded pharmaceutical companies to compete.
With the government playing a large role in price regulation and reimbursement, the ability to clearly demonstrate the value of a product is important to ensure access to the treatments that patients need through the public health system.
In addition, with many privately-insured patients in the Indian market paying high out-of-pocket costs, education about the need for, and benefits of a medication is key. To do this effectively, manufacturers need to tailor their communications strategies to reflect the specific channels that various patient populations use to communicate and receive information.
With deep local expertise in India, GLOBALHealthPR offers invaluable counsel in communicating your value story to maximise the chances for market access success.
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