From Disruptive Covid Chaos, Comes an Opportunity for India’s Pharmaceutical Industry 

The sector faces the challenge to transition from being pharmacy of the world to a global research laboratory.

COVID 19 has brought to the fore and fused the subjects of science, sustainability, and social issues. On  May 14, 2020 the Indian Council for Medical Research (ICMR) announced that it would partner with the World Health Organization (WHO) on the Global Solidarity Trial for Treatment of the COVID-19 disease and fast-track trials to help in finding an effective treatment.

25% or 1.69 million of the 4.64 million people affected by the virus have been cured. According to the WHO, there are currently no drugs licensed for the treatment or prevention of COVID-19. Vaccines and treatment options for COVID-19 are currently being investigated around the world. Researchers are performing randomized controlled trials in humans before potential vaccines and other treatments become available.

‘Global Solidarity’ is an international clinical trial to compare four treatment options against the standard of care to assess their relative effectiveness against COVID-19. WHO has donated Gilead’s Remdesivir and Merck’s Interferon to ICMR for solidarity trial in India.

There’s some evidence that certain medications may have the potential to be effective in treating the symptoms of COVID-19. Treatment options that are currently being investigated for protection against SARS-CoV-2 and treatment of COVID-19, include the use of Remdesivir, a broad-spectrum antiviral drug originally designed to target Ebola. Chloroquine used for the treatment of malaria and autoimmune diseases, is another drug that researchers say is highly effective at fighting the novel coronavirus. The Chinese government has recommended HIV drug Kaletra also known as Aluvia, as a treatment. Kaletra’s two antiretroviral components, Lopinavir and Ritonavir, are protease inhibitors designed to block HIV viral replication. ICMR has approved a Lopinavir-Ritonavir fixed dose combination (FDC), for Covid-19 patients. The Task Force for Repurposing of Drugs ranked Favipiravir and Tocilizumab as the most promising to fight the disease.

 Serum Institute of India, with backing from Dept. of Biotechnology is also developing recombinant Tuberculosis Bacille Calmette-Guérin (BCG) vaccine shots to improve the innate ability to fight the virus and reduce the severity of COVID-19 in India. The trials of the vaccine have begun.

Many different drugs, from HIV protease inhibitors to anti-malarial, immune modulators, offer the advantage of typically being off-patent and are already being manufactured by Indian generic pharmaceutical companies. The manufacture and sale of Remdesivir will require terms to be negotiated between Indian drug firms and Gilead. A few Indian firms have been granted permission for clinical trials on Favipiravir, including the Council of Scientific and Industrial Research (CSIR). While the manufacturing process for economical production of Favipiravir is in place, the manufacturing process Remdesivir will be challenging and costlier because of its molecular complexity.

Gilead Sciences has already filed 133 coronavirus patents related to Remdesivir in 43 countries and has been granted coronavirus patents in several countries, including the United States, China and Japan.

The Cancer Patients Aid Association (CPAA) has urged the government to revoke a patent granted to Gilead on a Remdesivir compound. The patent states that Remdesivir, is useful for treating “Filoviridae virus infection” to which family the novel coronavirus belongs. According to CPAA since Remdesivir may be an effective treatment of Coronavirus, granting monopoly rights to Gilead Sc. Inc. may against   public interest. It argues that the patent should be revoked so that generic version of the drug can be manufactured. 

On January 21, 2020, the Wuhan Institute of Virology, and Military Medicine Institute of the People’s Liberation Army Academy of Military Science, China jointly applied for a patent for Chinese invention to treatment of Covid19 using Remdesivir. The Institute’s intention in applying for coronavirus patents is to keep the original patent from having its legal rights practiced. In fact, the goal may just be to establish a cross licensing agreement with Gilead Sciences, so that neither party will practice its legal rights against the other. 

India is the third largest pharmaceutical market in the world by volume. Pharma exports from India stood at $19.13 billion in 2018-19.  Over 65% of WHO demand for DPT & BCG and 90% measles vaccines are supplied by India. Four Indian companies are among the top ten generic companies in the world. But how has the coronavirus pandemic has impacted India’s pharma sector. The COVID-19 pandemic has changed the variables of equations of Indian pharma industry. Pharmaceutical companies have emerged as safer bets for investors in the ongoing market turmoil. But the pandemic has raised various new issues for the pharma sector.

At least 20% of India’s total pharma exports to the world in volume terms is of antibiotics, in the form of formulations, tablets and capsules. India still imports 90% of Active Pharmaceutical Ingredients (API) and two-thirds of it from China. What is the way to reduce the dependence on China for APIs? Indian manufactures have been working on a value-added model sourcing from China and selling drugs to the rest of the world. Post pandemic the non-availability of raw material or active pharmaceutical ingredients (API) from China would impact India’s pharma exports. Prices of most of the APIs have jumped up in the last couple of months. Companies such as Divi’s Labs, Solara Active, Laurus Labs., Granules are facing problems because of the API plays. However, most product price increases may not reflect in retail drug prices, unless regulatory authorities decide to adjust accordingly. Companies such as Alkem Labs., Fermenta, Biotech, Glucosamine, Tyche Ind., Medicamen, Biocon are on the investors radar due to their limited import export exposure. Indian MSME’s should be encouraged and their tax structure simplified to delve into the API Business.

The way forward for the pharma sector is providing end-to-end indigenous production. The National Institute of Virology (NIV), Pune in collaboration with the ICMR has successfully developed India’s first indigenous antibody testing kit — “COVID KAVACH ELISA” — to combat COVID-19. The technology has been transferred for mass-scale production to ZydusCadila. 

India’s expertise in the pharma sector had been reverse engineering, with two growth engines the domestic sector and the Overseas market. In the post COVID-19 scenario would pharma companies dump generics and get into high margin licensed drugs in US? The pandemic has shown that there is still a huge market for vaccines. But that will require more investment into R&D and scaling up the ability to quickly move from lab to market. China has been moving into U.S. market with Complex Generics and Small Molecules. Can Indian companies hold on to their high-end single digit growth in US market? 

The top hundred pharma companies collectively have only Rs.40,000 crore debt capital which implies that they are very underleveraged. There is massive opportunity for the capital to increase which will trigger expansion in this sector. Angel investors need to start creating an ecosystem. There is immense potential for implementing Blockchain technology in medicine with vigour, connecting the various actors be it doctors, diagnostic centers,pharmacies, and allied services like insurance.

There are many questions that seek clarification in the COVID-19 scenario. For instance, will India witness a reduction in dependence of Central Drugs Standard Control Organisation (CDSCO) on international regulators like WHO Good Manufacturing Practice (GMP) U.S. Food and Drug Administration (FDA), the European Medicines Agency (EMA) for drug approvals. 

 At this juncture, apart from trying new drugs the pharma industry has the burden of research in testing of old medicines in this new situation where neatly 90% of the cases are asymptomatic, which is serious from an epidemiological point of view. The sector must expand the trials from clinical single testing to pharmacoepidemiologic, because apart from testing the efficacy of the drugs it is also necessary to ensure their accessibility, availability, and affordability. 

The only true exit strategy to cope with COVID-19 is science and the onus of finding and distributing the vaccine which is the only way to win the battle with the virus lies with the pharmaceutical sector. India’s pharmaceutical sector faces the challenge to transition from being pharmacy of the world to a research laboratory. In this the role of Indian government would be to promote transparency and mutual accountability to ensure universal, equitable access to the vaccines. Vaccine developers should get access to accelerated funding. And beyond the narrow, immediate goal of searching for a vaccine COVID19 has brought to the fore the need for a supporting a holistic response, focusing on providing equitable access to diagnostics, therapeutics, and strengthening the public health system for future pandemic threats.