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 1.4 billion and a $280 billion healthcare sector growing at 16.9 percent, India is an attractive pharmaceutical market. It ranks in the top three globally in volume and the top ten in sales. Yet, gaining market access and reimbursement for innovative medicines in India has long been viewed as a challenge by the pharmaceutical industry.
As the Indian government works to provide comprehensive health coverage for all its citizens, disparities persist between poorer and richer states. While new government-financed health insurance programs are increasing coverage, insurance remains limited. Further, India’s patent laws strictly limit the protection of medicines when the active ingredients are already known. As a result, branded generics currently make up the lion’s share of India’s 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 a growing need for innovative therapies in the country.
India’s Payer Stakeholders
- Only 37 percent of Indian citizens have any form of health insurance, so most healthcare costs have historically been paid out-of-pocket.
- Rashtriya Swasthya Bima Yojna (RSBY), a public health insurance scheme, provides hospital coverage for most diseases and pre-existing health conditions for individuals living below the poverty line, although ambulatory care is not covered. The Employees’ State Insurance (ESI) scheme, is organized by the Ministry of Labour and Employment for the workforces of organizations that employ ten or more individuals.
- The Government of India launched Pradhan Mantri Jan Arogya Yojana (PMJAY), the world’s largest health insurance scheme fully financed by the government. Poor and vulnerable citizens are eligible for the health benefits covered by this payer, which include, but are not limited to: diagnostics, medicines, hospitalization costs, and medical treatment expenses. PMJAY has been rolled out to the bottom 40 percent of India’s poor and vulnerable population.
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 authorization. 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.
- 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.” Certain rare/orphan medicines, HIV, 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.
Why Generics Matter in India:
- 75 percent of India’s population lives in rural areas, and average monthly income is around $143 USD or less, with 46 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.
- Due to complex patent restrictions in India, branded generics make up 70-80 percent of all drugs sold in India. Unless a product contains an entirely 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. To-date, there are more than 90 approved biosimilars in India, with at least 50 on the market. Local manufacturers are now extending their reach globally in an attempt to compete with leading patented biologics.
- Biosimilars can only be considered against an authorized 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 authorization 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 demonstrate the value of a product is vital to ensure access to the treatments that patients need through the public health system.
Additionally, 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 the rise of telemedicine and the e-pharmacy market, a consolidation of the supply chain is likely to happen.
With deep local expertise in India, GLOBALHealthPR offers invaluable counsel in communicating your value story to maximize the chances for market access success.
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