PROJECT

REPORT ON

GROWING PHARMACEUTICAL INDUSTRY A Case Study

Mr. Amit Rai MMM -V

Batch 2005 - 2008

N . L. Dalmia Institute of Management Studies And Research

Contents

1 History 2 Research and development

o o o

2.1 The cost of innovation 2.2 Controversy about drug development and testing

3 Product approval in the US o 3.1 Orphan drugs o 3.2 Legal issues o 3.3 Patents
o

4 Industry revenues o 4.1 Sales leaders o 4.2 Patents and generics o 4.3 Medicare Part D o 4.4 Mergers, acquisitions, and co-marketing of drugs
o

5 Marketing o 5.1 To healthcare professionals o 5.2 To insurance and public health bodies o 5.3 To retail pharmacies and stores o 5.4 Direct to consumer advertising o 5.5 Controversy about drug marketing and lobbying
o

6 Developing world o 6.1 Nigerian clinical trial o 6.2 Charitable programmes

o

7 Industry associations

8 Regulatory authorities

History
Most of today's major pharmaceutical companies were founded in the late 19th and early 20th centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became mass-manufactured and distributed. Switzerland, Germany and Italy had particularly strong industries, with the UK and US following suit.

Legislation was enacted to test and approve drugs and to require appropriate labeling. Prescription and nonprescription drugs became legally distinguished from one another as the pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to the development of systematic scientific approaches, understanding of human biology (including DNA) and sophisticated manufacturing techniques.

Numerous new drugs were developed during the 1950s and mass-produced and marketed through the 1960s. These included the first oral contraceptive, The Pill, Cortisone, blood-pressure drugs and other heart medications. MAO Inhibitors, chlorpromazine (Thorazine), Haldol (Haloperidol) and the tranquilizers ushered in the age of psychiatric medication. Valium (diazepam), discovered in 1960, was marketed from 1963 and rapidly became the most prescribed drug in history, prior to controversy over dependency and habituation.

Attempts were made to increase regulation and to limit financial links companies and prescribing physicians, including by the relatively new US FDA. Such calls increased in the 1960s after the thalidomide tragedy came to light, in which the use of a new tranquilizer in pregnant women caused severe birth defects. In 1964, the World Medical Association issued its Declaration of Helsinki, which set standards for clinical research and demanded that subjects give their informed consent before enrolling in an experiment. Phamaceutical companies became required to prove efficacy in clinical trials before marketing drugs.

Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary center of pharmaceutical production without patent protection.

The industry remained relatively small scale until the 1970s when it began to expand at a greater rate Legislation allowing for strong patents, to cover both the process of manufacture and the specific products, came in to force in most countries. By the mid1980s, small biotechnology firms were struggling for survival, which led to the formation of mutually beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts of the smaller firms. Pharmaceutical manufacturing became concentrated, with a few large companies holding a dominant position throughout the world and with a few companies producing medicines within each country.

The pharmaceutical industry entered the 1980s pressured by economics and a host of new regulations, both safety and environmental, but also transformed by new DNA chemistries and new technologies for analysis and computation. Drugs for heart disease and for AIDS were a feature of the 1980s, involving challenges to regulatory bodies and a faster approval process

Managed care and Health maintenance organizations (HMOs) spread during the 1980s as part of an effort to contain rising medical costs, and the development of preventative and maintenance medications became more important. A new business atmosphere became institutionalized in the 1990s, characterized by mergers and takeovers, and by a dramatic increase in the use of contract research organizations for clinical development and even for basic R&D. The pharmaceutical industry confronted a new business climate and new regulations, born in part from dealing with world market forces and protests by activists in developing countries. Animal Rights activism was also a problem.

Marketing changed dramatically in the 1990s, partly because of a new consumerism] The Internet made possible the direct purchase of medicines by drug consumers and of raw materials by drug producers, transforming the nature of business. In the US, Direct-toconsumer advertising proliferated on radio and TV because of new FDA regulations in 1997 that liberalized requirements for the presentation of risks. The new antidepressants, the SSRIs, notably Fluoxetine (Prozac), rapidly became bestsellers and marketed for additional disorders

Drug development progressed from a hit-and-miss approach to rational drug discovery in both laboratory design and natural-product surveys. Demand for nutritional supplements and so-called alternative medicines created new opportunities and increased competition in the industry. Controversies emerged around adverse effects, notably regarding Vioxx in the US, and marketing tactics. Pharmaceutical companies became increasingly accused of disease mongering or over-medicalizing personal or social problems

There are now more than 200 major pharmaceutical companies, jointly said to be more profitable than almost any other industry, and employing more political lobbyists than any other industry.Advances in biotechnology and the human genome project promise ever more sophisticated, and possibly more individualized, medications.

Research and development

Drug discovery is the process by which potential drugs are discovered or designed. In the past most drugs have been discovered either by isolating the active ingredient from traditional remedies or by serendipitous discovery. Modern Biotechnology often focuses on understanding the metabolic pathways related to a disease state or pathogen, and manipulating these pathways using molecular biology or Biochemistry. A great deal of early-stage drug discovery has traditionally been carried out by universities and research institutions.

Drug development refers to activities undertaken after a compound is identified as a potential drug in order to establish its suitability as a medication. Objectives of drug development are to determine appropriate Formulation and Dosing, as well as to establish safety. Research in these areas generally includes a combination of in vitro studies, in vivo studies, and clinical trials. The amount of capital required for late stage development has made it a historical strength of the larger pharmaceutical companies. Often, large multinational corporations exhibit vertical integration, participating in a broad range of drug discovery and development, manufacturing and quality control, marketing, sales, and distribution. Smaller organizations, on the other hand, often focus on a specific aspect such as discovering drug candidates or developing formulations. Often, collaborative agreements between research organizations and large pharmaceutical companies are formed to explore the potential of new drug substances .

The cost of innovation

Drug discovery and development is very expensive; of all compounds investigated for use in humans only a small fraction are eventually approved by the FDA. Each year, only about 25 truly novel drugs (New chemical entities) are approved for marketing. This approval comes only after heavy investment in pre-clinical development and clinical trials, as well as a commitment to ongoing safety monitoring. Drugs which fail part-way through this process often incur large costs, while generating no revenue in return. If the cost of these failed drugs is taken into account, the cost of developing a successful new drug (New chemical entity or NCE), has been estimated at about 1 billion USD[3](not including marketing expenses). A study by the consulting firm Bain & Company reported that the cost for discovering, developing and launching (which factored in marketing and other business expenses) a new drug (along with the prospective drugs that fail) rose over a five year period to nearly $1.7 billion in 2003.

These estimates also take into account the opportunity cost of investing capital many years before revenues are realized (see Time-value of money). Because of the very long time needed for discovery, development phamaceuticals, these costs can accumulate to nearly half the total expense. Some approved drugs, such as those based on reformulation of an existing active ingredient (also referred to as Line-extensions) are much less expensive to develop. The consumer advocacy group Public Citizen suggests on its web site that the actual cost is under $200 million, about 29% of which is spent on FDArequired clinical trials. For me-too-drugs and for generics, the cost are even less.

Calculations and claims in this area are controversial because of the implications for regulation and subsidization of the industry through federally funded research grants.

Controversy about drug development and testing

. In western countries generally the law allows pharmacy companies to withhold information from research that they do not wish to disclose and the usual procedure is that severl aresearch programmes are carried out and only the most favorable ones are published. In response to public outcry about specific cases in which unfavorable data from pharmaceutical company-sponsored research was suppressed, the Pharmaceutical Research and Manufacturers of America have published new guidelines urging companies to report all findings and limit the financial involvement in drug companies of researchers. Drug researchers not directly employed by pharmaceutical companies often look to companies for grants, and companies often look to researchers for studies that will make their products look favorable. Sponsored researchers are rewarded by drug companies,

for example with support for their conference/symposium costs. Lecture scripts and even journal articles presented by academic researchers may actually be 'ghost-written' by pharmaceutical companies. Some researchers who have tried to reveal ethical issues with clinical trials or who tried to publish papers that show harmful effects of new drugs or cheaper alternatives have been threatened by drug companies with lawsuits.

Legal issues
Where pharmaceutics have been shown to cause side-effects, civil action has occurred, especially in countries where tort payouts are likely to be large. Due to high-profile cases leading to large compensations, most pharmaceutical companies endorse tort reform. Recent controversies have involved Vioxx and SSRI antidepressants.

Patents
Depending on a number of considerations, a company may apply for and be granted a patent for the drug, or the process of producing the drug, for about 20 years. Only after rigorous study and testing, which can take as long as 12 years, will governmental authorities grant permission for the company to market and sell the drugs.

Industry revenues
For the first time ever, in 2006, global spending on prescription drugs topped $600 billion, even as growth slowed somewhat in Europe and North America. Sales of prescription medicines worldwide rose 7 percent to $602 billion, according to IMS Health, a pharmaceutical information and consulting company. The United States still accounts for most, with $252 billion in annual sales. Sales there grew 5.7 percent. Emerging markets such as China, Russia, South Korea and Mexico outpaced that market, growing a huge 81 percent.

In 2004 the U.S. comprised roughly 45% of the pharmaceutical market worldwide, while Europe comprises about 25% (AMR Research). 2004 global dollar sales reached $550 billion, a 7% increase over 2003, which in turn represented a 9% increase over 2002. 2004 US sales grew to $235.4 billion, a growth rate of 8.3% compared with 11.5% growth from 2002 to 2003. US profit growth was maintained even whilst other top industries saw slowed or no growth. Pfizer's cholesterol pill Lipitor remains the best-selling drug in the world for the fifth year in a row. Its annual sales were $12.9 billion, more than twice as much as its closest competitors: Plavix, the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis;

Nexium, the heartburn pill from AstraZeneca; and Advair, the asthma inhaler from GlaxoSmithKline.[12] IMS Health publishes an analysis of trends expected in the pharmaceutical industry in 2007, including increasing profits in most sectors despite loss of some patents, and new 'blockbuster' drugs on the horizon Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at the top 10 pharma companies as a result of slowdown in R&D innovation and the expiry of patents on major products, with 19 blockbuster drugs losing patent.

Sales leaders
The top ten pharmaceutical companies by 2006 sales are Rank Company Sales ($m) Growth (%) Market Share (%) 1 Pfizer 45,083 1.8 7.2 2 GlaxoSmithKline 37,034 9.7 5.9 3 Sanofi-Aventis 35,638 5.0 5.7 4 Novartis 28,880 18.0 4.6 5 HoffmannLa Roche 26,596 21.8 4.2 6 AstraZeneca 25,741 10.5 4.1 7 Johnson & Johnson 23,267 4.2 3.7 8 Merck & Co. 22,636 2.8 3.6 9 Wyeth 15,683 2.4 2.5 10 Eli Lilly and Company 14,814 7.5 2.4

Patents and generics

Drugs are patentable, granting exclusivity rights typically for 20 yearsHowever, it often takes as long as 12 years to approve a drug for patient use Patent protection enables the owner of the patent to recover the costs of research and development through high profit margins for the branded drug. When the patent protection for the drug expires, a generic drug is usually developed and sold by a competing company. The development and approval of generics is less expensive, allowing them to be sold at a lower price. Often the owner of the branded drug will introduce a generic version before the patent expires in order to get a head start in the generic market.

Medicare Part D
In 2003 the United States enacted the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), a program to provide prescription drug benefits to the elderly and disabled. This program is a component of Medicare (United States) and is known as Medicare Part D. This program, set to begin in January 2006, will significantly alter the

revenue models for pharmaceutical companies. Revenues from the program are expected to be $724 billion between 2006 and 2015. Pharmaceuticals developed by biotechnological processes often must be injected in a physician's office rather than be delivered in the form of a capsule taken orally. Medicare payments for these drugs are usually made through Medicare Part B (physician office) rather than Part D (prescription drug plan).

Mergers, acquisitions, and co-marketing of drugs

A merger, acquisition, or co-marketing deal between pharmaceutical companies may occur as a result of complementary capabilities between them. A small biotechnology company might have a new drug but no sales or marketing capability. Conversely, a large pharmaceutical company might have unused capacity in a large sales force due to a gap in the company pipeline of new products. It may be in both companies' interest to enter into a deal to capitalize on the synergy between the companies. The difference between the value of the two companies after the deal and before the deal is known as the synergy value of the deal.

Marketing
Pharmaceutical companies commonly spend a large amount on advertising, marketing and lobbying. In the US, drug companies spend $19 billion a year on promotions. Advertising is common in healthcare journals as well as through more mainstream media routes. In some countries, notably the US, they are allowed to advertise direct to the general public. Pharmaceutical companies generally employ sales people (often called 'drug reps' or, an older term, 'detail men') to market directly and personally to physicians and other healthcare providers.In some countries, notably the US, pharmaceutical companies also employ lobbyists to influence politicians. Marketing of prescription drugs in the US is regulated by the federal Prescription Drug Marketing Act of 1987

To healthcare professionals
Physicians are perhaps the most important players in pharmaceutical sales because they write the prescriptions that determine which drugs will be used by the patient. Influencing the physician is often seen as the key to prescription pharmaceutical sales. A mediumsized pharmaceutical company might have a sales force of 1000 representatives. The largest companies have tens of thousands of representatives. Currently, there are approximately 100,000 pharmaceutical sales reps in the United States pursuing some 120,000 pharmaceutical prescribers. The number doubled in the four years from 1999 to 2003. Drug companies spend $5 billion annually sending representatives to physician offices. Pharmaceutical companies use the service of specialized healthcare marketing

research companies to perform Marketing research among Physcians and other Healthcare professionals.

To insurance and public health bodies

Private insurance or public health bodies (e.g. the NHS in the UK) decide which drugs to pay for, and restrict the drugs that can be prescribed through the use of formularies.

This, along with the high-margin companies that can realise for their most successful medicines, make pharmaceutical marketing complex. There are a number of firms that specialize in data and analytics for pharmaceutical marketing (Yellowikis). Public and private insurers restrict the brands, types and number of drugs that they will cover. Not only can the insurer affect drug sales by including or excluding a particular drug from a formulary, they can affect sales by tiering or placing bureaucratic hurdles to prescribing certain drugs as well. In January 2006, the U.S. instituted a new public prescription drug plan through its Medicare program known as Medicare Part D. This program engages private insurers to negotiate with pharmaceutical companies for the placement of drugs on tiered formularies.

To retail pharmacies and stores

Commercial stores and pharmacies are a major target of non-prescription sales and marketing for pharmaceutical companies .

Direct to consumer advertising

Since the 1980s new methods of marketing for prescription drugs to consumers have become important. Direct-to-consumer media advertising was legalised in the FDA Guidance for Industry on Consumer-Directed Broadcast Advertisements.

Controversy about drug marketing and lobbying

There has been increasing controversy surrounding pharmaceutical marketing and influence. There have been accusations and findings of influence on doctors and other health professionals through drug reps, including the constant provision of marketing 'gifts' and biased information to health professionals; highly prevalent advertising in journals and conferences; funding independent healthcare organizations and health promotion campaigns; lobbying physicians and politicians (more than any other industry

in the US; sponsorship of medical schools or nurse training; sponsorship of continuing educational events, with influence on the curriculum; and hiring physicians as paid consultants on medical advisory boards. Some advocacy groups, such as No Free Lunch, have criticized the effect of drug marketing to physicians because they say it biases physicians to prescribe the marketed drugs even when others might be cheaper or better for the patientThere have been related accusations of disease mongeringover-medicalising) to expand the market for medications. An inaugural conference on that subject took place in Australia in 2006A 2005 review by a special committee of the UK government came to all the above conclusions in a European Union context whilst also highlighting the contributions and needs of the industry.

Developing world

The role of pharmaceutical companies in the developing world is a matter of some debate, ranging from those highlighting the aid provided to the developing world, to those critical of the use of the poorest in human clinical trials, often without adequate protections, particularly in states lacking a strong rule of law. Other criticisms include an alleged reluctance of the industry to invest in treatments of diseases in less economically advanced countries, such as malaria; Criticism for the price of patented AIDS medication, which could limit therapeutic options for patients in the Third World, where the most people have AIDS . Under World Trade Organization rules, a developing country has options for obtaining needed medications under compulsory licensing or importation of cheaper versions of the drugs, even before patent expiration (WTO Press Release). Pharmaceutical companies often offer much needed medication at no or reduced cost to the developing countries. Proposals to allow the manufacture of generic AIDS drugs are not without controversy; it is sometimes claimed that this might cause pharmaceutical companies to move away from AIDS drug research and focus their research on other, more profitable areas. In March of 2001, South Africa was sued by 41 pharmaceutical companies for their Medicines Act, which allowed the import and generic production of cheap AIDS drugs. The case was later dropped after protest around the world.

Nigerian clinical trial

In 1996, a pediatric clinical trial conducted on behalf of Pfizer tested the antibiotic Trovan allegedly without first obtaining the informed consent of participants or their parents.

Largest 50 pharmaceutical companies

The following is a list of the largest pharmaceutical and biotech companies ranked by healthcare revenue. Some companies (eg, Bayer and Procter & Gamble) have additional revenue not included here. The phrase Big Pharma is often used to refer to companies with revenue in excess of $3 billion, and/or R&D expenditure in excess of $500 million, and represents the first 30 or so companies in this list. Healthcare Healthcare Net income/ Employees Revenue R&D 2006 (loss) 2006 2006 2006 (USD millions) (USD millions)

Revenue Rank 2006

Company

Country

(USD millions)

Johnson & Johnson Pfizer

USA

53,324

7,125

11,053

138,000

USA United Kingdom Switzerland France

48,371

7,599

19,337

122,200

GlaxoSmithKline

42,813

6,373

10,135

106,000

4 5

Novartis Sanofi-Aventis HoffmannLa Roche

37,020 35,645

5,349 5,565

7,202 5,033

102,695 100,735

Switzerland

33,547

5,258

7,318

100,289

AstraZeneca

United Kingdom USA USA

26,475

3,902

6,063

98,000

8 9

Merck & Co. Abbott

22,636 22,476

4,783 2,255

4,434 1,717

74,372 66,800

Laboratories 10 11 Wyeth Bayer Bristol-Myers Squibb USA Germany 20,351 18,216 3,109 1,791 4,197 1,577 66,663 61,880

12

USA

17,914

3,067

1,585

60,000

13 14

Eli Lilly and Co. USA Amgen Boehringer Ingelheim USA

15,691 14,268

3,129 3,366

2,663 2,950

50,060 48,000

15

Germany

13,284

1,977

2,163

43,000

16

Schering-Plough USA Baxter International Takeda Pharmaceutical Co. Genentech

10,594

2,188

1,057

41,500

17

USA

10,378

614

1,397

38,428

18

Japan

10,284

1,620

2,870

35,000

19 20 21

USA

9,284 8,964 8,408

1,773 n/a 495

2,113 10,340 546

33,500 29,258 26,670

Procter & Gamble USA Teva Pharmaceutical Israel

Industries 22 23 24 25 26 27 28 29 30 Astellas Pharma Japan Daiichi Sankyo Novo Nordisk Eisai Merck KGaA Alcon Akzo Nobel UCB Nycomed Forest Laboratories Solvay Genzyme Allergan Japan Denmark Japan Germany Switzerland Netherlands Belgium Switzerland 7,850 7,158 6,520 5,583 5,175 4,897 4,694 4,426 4,264 1,435 1,459 1,063 926 772 512 741 1,024 n/a 1,122 671 1,086 604 1,258 1,348 1,449 492 -105 23,613 20,100 15,358 14,993 13,900 13,500 13,000 12,741 10,533

31

USA

3,442

941

454

9,649

32 33 34

Belgium USA USA

3,268 3,187 3,063

533 650 1,056

1,026 -17 -127

9,000 8,477 8,423

35 36

Gilead Sciences CSL Chugai Pharmaceutical Co. Biogen Idec

USA Australia

3,026 2,788

384 161

-1,190 454

6,772 6,400

37

Japan

2,787

467

328

5,962

38 39

USA

2,683 2,292

718 197

218 15

5,907 5,830

Bausch & Lomb USA Taisho Pharmaceutical Co.

40

Japan

2,069

244

132

5,756

41

King USA Pharmaceuticals Watson USA Pharmaceuticals Mitsubishi Pharma

1,989

254

289

5,191

42

1,979

131

-445

5,126

43

Japan

1,945

403

208

5,111

44

Shire

United Kingdom USA Japan

1,797

387

278

4,958

45 46

Cephalon Dainippon Sumitomo

1,764 1,763

403 350

145 193

4,913 3,750

Pharma Kyowa Hakko Kogyo Shionogi & Co. Mylan Laboratories H. Lundbeck

47

Japan

1,698

268

108

2,895

48

Japan

1,640

320

159

2,868

49

USA

1,612

104

217

2,800

50

Denmark

1,552

329

186

2,515

Source: Top 50 pharmaceutical companies, MedAdNews, September 2007

Indian Pharmaceutical Industry: An Overview

Domestic & External Trade Future Prospects Research & Development

The Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs at affordable prices are available to the vast population of this sub-continent.

Richard Gerster The Indian Pharmaceutical Industry today is in the front rank of Indias science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the

market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control.

The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property Protection regime is well set to take on the international market. ADVANTAGE INDIA Competent workforce: India has a pool of personnel with high managerial and technical competence as also skilled workforce. It has an educated work force and English is commonly used. Professional services are easily available. Cost-effective chemical synthesis: Its track record of development, particularly in the area of improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework: India has a 53 year old democracyand hence has a solid legal framework and strong financial markets. There is already an established international industry and business community.

Information & Technology: It has a good network of world-class educational institutions and established strengths in Information Technology. Globalisation: The country is committed to a free market economy and globalization. Above all, it has a 70 million middle class market, which is continuously growing.

Consolidation: For the first time in many years, the international pharmaceutical industry is finding great opportunities in India. The process of consolidation, which has become a generalized phenomenon in the world pharmaceutical industry, has started taking place in India. THE GROWTH SCENARIO India's US$ 3.1 billion pharmaceutical industry is growing at the rate of 14 percent per year. It is one of the largest and most advanced among the developing countries. Over 20,000 registered pharmaceutical manufacturers exist in the country. The domestic pharmaceuticals industry output is expected to exceed Rs260 billion in the financial year 2002, which accounts for merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn (79%). In financial year 2001, imports were Rs 20 bn while exports were Rs87 bn.

STEPS TO STRENGTHEN THE INDUSTRY Indian companies need to attain the right product-mix for sustained future growth. Core competencies will play an important role in determining the future of many Indian pharmaceutical companies in the post product-patent regime after 2005. Indian companies, in an effort to consolidate their position, will have to increasingly look at merger and acquisition options of either companies or products. This would help them to offset loss of new product options, improve their R&D efforts and improve distribution to penetrate markets. Research and development has always taken the back seat amongst Indian pharmaceutical companies. In order to stay competitive in the future, Indian companies will have to refocus and invest heavily in R&D. The Indian pharmaceutical industry also needs to take advantage of the recent advances in biotechnology and information technology. The future of the industry will be determined by how well it markets its products to several regions and distributes risks, its forward and backward integration capabilities, its R&D, its consolidation through mergers and acquisitions, co-marketing and licensing agreements. Emerging Trends Some In Indian Pharmaceutical Industry Pharma Industry in West Bengal: The Road Ahead
Prof. Arup Mukherjee and Debashis Bhattacharya

Pharmaceutical sector is by far one of the most diverse, knowledge driven, technology intensive growth area, where fast track advancements can surely generate significant resources. Despite competitions and regulatory issues looming large, current Indian scenario remains more or less intact. Indian domestic market by 2005 stands at $ 5.3 billion dollar, export in value terms stands at $ 3.7 billion and import about $ 985 million, which is delivered by about 5 million people in direct and 24 million in indirect employment. It is interesting to note that in 1995 when

India joined WTO, the pharmaceuticals export was valued at around $600 million. By 2005, the export value stands at $3.7 billion and accounts for more than 61 percent of industry turn over. Indian market for pharmaceuticals was projected an average growth of 15-20% during 2005-20010. Sector wise growth tilt is visible in way of increasing contract manufacturing, outsourcing, and foreign acquisition mostly in generics field, joint ventures and value addition. Scenario in West Bengal has not seen much change and is currently looking for some fast track decisions to take advantages in a complex global growth market. The doors of the neighboring state of Sikkim have opened up recently in both manufacturing activity related tax concession and in market terms with extended competitive possibilities through China for opening up of road routs through Nathula Pass. The genesis of Indian pharmaceutical industry is always traced to the state of West Bengal. The starting point was in 1901 when the noted teacher and scientist Acharya Prafulla Chandra Ray laid the foundation stones of Bengal Chemical & Pharmaceutical Works Ltd (BCPL). BCPL is still a success story with four factories - two in West Bengal, one in Mumbai and one in Kanpur, with sales outlets in 11 cities, and a wide self distribution network across the country and abroad with about 1500 listed distributors. BCPL business model is unique in that, it has a wide range of related product mix, that include, fine chemicals, active pharmaceutical ingredients (APIs), perfumeries, toiletries, hospital and surgical equipments, sera, vaccine and fire extinguisher. The state capital, Kolkata was considered, at one point of time, for production of cost effective and quality drugs. Pharmaceutical industries of Kolkata shared more than 80 per cent of the national drug production in 1940, which has gradually been reduced to less than eight per cent in 2004. The Indian pharmaceutical sector in general is highly fragmented, both in terms of the number of manufacturers and in number and variety of products. A vast majority of Indian pharmaceutical firms are small in global terms having annual revenues of less than $5 million. Confederation of Indian Industries (CII) estimates that about 80% of them are engaged in some type of contract manufacturing. West Bengal does extend several bulk drugs and formulation products standing on available technology strength. However, product mix of any pharmaceutical unit should adequately be spread across therapeutic segments for growth and to provide a protection net that needs to concentrate currently on individual concerns in West Bengal. Interesting models can be the surviving original companies like BCPL. Major India centric therapeutic segments include antidiabetics, cardiovascular medicines, anti-infective, anti-cancer and anti-HIV medicines and anti-inflammatory groups. Gradually, quality life drugs like steroid hormone products, anxiolytics and anti-arthritis are also creating impact in India. It is not relevant to further compete in low margin me-too formulation areas. West Bengal is currently in a position to provide a contract manufacturing hub in synthetic as well as formulation areas particularly in specific therapeutic segments like anti-cancer, anxiolytics, cardiovascular, gastrointestinal and anti-infectives. Skilled manpower is the basic input and that is a plenty in West Bengal. Environment controlled location for Pharma- Biotech processing zone can provide a great impetus to this sector growth. CRO agencies are also expected to grow in region particularly in discovery research. Entrepreneur orientation of the region and the existent entrepreneurship knowledge gap and increasing capital input requirements in pharmaceutical manufacturing however remains a bottleneck. The State Directorate of Drugs Control has extended a helping hand to the pharmaceutical producers in meeting global standards in stages. The West Bengal

government is planning to announce a comprehensive Drug Policy for the state. Recent years have seen increased academia-industry initiatives. Academic institutions like the Department of Pharmaceutical Technology of Jadavpur University and Indian Institute of Chemical Biology (IICB) have done commendable job in this direction. A strong motivation within the pharmaceutical industry is now required to regain its lost pride and position. Trends in pharmaceutical industry in West Bengal can be seen as: Synthetic specialty drugs as also some biotechnology focus might be seen soon in West Bengal through major players like Dabur and Biocon. Multinationals (MNC's) like Pfizer and Organon initiated their manufacturing activities in West Bengal with a focus on bulk drugs. The effect was negated in government taxation and pricing policies. The driving factors, however, remained as availability of skilled manpower and phytochemical raw materials and access to different global regions through east. Pharmaceutical industry of West Bengal is trying to achieve and develop expertise on formulation and development for a number of sustained release formulations. Presently some such formulations have gained confidence of medical fraternity and have seen commercial success in the market. Since all surviving industries in West Bengal are GMP compliant, requirements of advanced tools and technology, validated and aseptic processing will no more be a problem centers. Expertise in synthetic chemistry and pharmaceutical manufacturing in West Bengal remains a traditional strength that will allow the West Bengal pharmaceutical sector to position itself as the provider of quality products at competitive price at least for the generics market in India. Biotechnology is set to sweep all aspects of life around the world. The Biotech sector is poised to create arguably, the greatest revolution that the business-world has seen. With adequate human resource input, investments in this sector are expecting to grow. India is already set to become the vaccine hub of the world with a silent transformation of institutions going on in India over the last 4-5 years. The government is taking several initiatives to create and facilitate an environment of innovation and research culture in the country. The achievements in the field of biotechnology will not be sustainable for long if participation of private sector enterprises in the field is not encouraged. Emphasis is being laid on participation of internationally acclaimed biotech firms in joint ventures. Relatively recently, several contract Research Organisations (CRO's) mostly in discovery research have started full functioning from West Bengal. The global CRO market is estimated at $10 billion and growing at an annual rate of 14 to 16 percent. The 2004 market size for CRO was pegged at Rs. 300-400 crore. The trend is to set up bioequivalence, clinical trial and discovery based CROs as service growth sector. The pharmaceutical industry sector is in fact more intellectually -driven than the IT industry. IT in itself plays a larger role in the development of pharmaceutical sector. Constant IT solution inputs are today required in areas ranging from data management, clinical trial management, statistical analysis, data backup, compliance to regulatory requirements and validation of systems. In this regard bioinformatics is the next big opportunity. Few Indian companies that have a focus on the bioinformatics market like TCS, are active in West Bengal. TCS is offering services

for understanding all aspects of the use of bioinformatics in drug discovery, comparative genomics, protein structure, integrated database design. The global biotechnology market is in the range of $30-40 billion, growing at around 25 percent a year. Bioinformatics constitutes about 8-10 percent of the total market size of about $2.5 billion currently and is estimated to rise to about $5-6 billion by the end of this decade. Contract research and manufacturing services (CRAMS) market in India as well as in West Bengal is growing at a significant rate of about 20 per cent. In 2005 Indian CRAMS market was estimated at $532 million with contract manufacturing accounting for almost 84% of the total. Intellectual Property Rights (IPR) being firmly in place investments in developments and innovations are poised to grow and West Bengal is only to gain significantly from that. Experts maintained that Indian companies have a capacity to gain 35 to 40 % of global CRAMS market. The Associated Chamber of Commerce and Industry of India (Assocham) projected the domestic Indian CRAMS market will reach % 900 million by 2010 and the demand in clinical research will grow to $200 million by end of 2007 and to $ 1 billion by 2010. India has emerged as an attractive destination for outsourcing, as it provides low cost manufacturing at a world-class quality. Pharmaceutical production costs are almost 50 percent lower in India than in Western nations, and R&D costs are about one-eighth and clinical trial expenses around one-tenth of Western levels. Expectations are for sizable revenue generation because innovator companies are trying to concentrate more on the research side of the value chain than on the sales and marketing. An increasing number of Indians are also dipping into their own pockets to buy overthe-counter (OTC) drugs. The OTC market is currently worth about $940m and growing at 20% a year - more than double the rate at which the market for prescription products is rising. In market value terms West Bengal constitutes a significant market, both for dense population and population awareness levels. West Bengal is also in access route to very densely populated regions of globe through China, South East Asia and Myanmar. Significant opportunity lies here to take a specialized market leadership. In view of a significant market access location, a strong knowledge based manpower support, very good transport, communication and manpower supply position added with proactive and favorable government support, West Bengal currently is a springboard for pharmaceutical industry developments. Hence, with its enormous advantages, including a large well-educated, skilled and english speaking workforce, low operational costs, huge domestic market including South East Asia, Kolkata has the potential to become the region's hub for pharmaceutical discovery, research, manufacturing and healthcare services. However, to make this happen, it is imperative that the regulatory environment, West Bengal government's strong commitments towards pro-industry policies should continue to improve. The pharmaceuticals industry is grappling with the highest level of attrition. There is an acute shortage of manpower at all levels in the industry. It is becoming increasingly difficult to find the right people for the right position. Human resources in the pharma industry is not well developed at all.

As far as emerging trends are concerned, consolidation will take place and is a logical thing to happen. An exemption on excise and other taxes, subsidies in capital investment and interest and reimbursement of insurance premium etc., are the prime reasons for selecting Sikkim for investment against West Bengal. Similar support also needs to be devised along with encouragements to regional enterprise for a faster growth in industrialization in this sector.
(Prof. Arup Mukherjee is Senior Professor and Ex-Head, Department of Chemical Technology, Calcutta University and Debashis Bhattacharya is a Researcher at the Division of Pharmaceuticals and Fine Chemicals Technology, Department of Chemical Technology, Calcutta University)

Key Players in the Indian Pharmaceutical Industry

WTO TRIPS and in the midst of the practical implications of ensuring compliance with product patents, how is the Indian pharmaceutical industry facing up to new regulations to its market? Indian pharmaceutical companies are able to provide FDA approved facilities for the complete range of services for drug development. R&D services, API sourcing, finished formulation manufacture and clinical trials can all be completed in India, at less cost than in many developed markets. The leading Indian pharmaceutical companies are also beginning to increase market presence and market share in the US and EU markets. Pivotal period of change The Indian pharmaceutical market is entering a pivotal period of change. Although it is unlikely to see significant growth before 2011, visiongain expects extensive company activity as the leading Indian pharmaceutical companies strive towards international competitiveness. Global pharmaceutical companies have already begun to take advantage of the changing regulatory and economic conditions in India. The following five years will see further merger and acquisition activity, including key overseas acquisitions.

The Leading Pharmaceutical Companies Within India

1. Ranbaxy Laboratories 2. Cipla

3. Dr Reddy's Laboratories 4. Sun Pharmaceuticals 5. Nicholas Piramal 6. Zydus Cadila 7. Biocon 8. Glenmark Pharmaceuticals 9. Wockhardt Ltd

10. Orchid Chemicals

A Focus On Top Indian Pharmaceutical Companies

Ranbaxy Laboratories Limited, India's largest pharmaceutical company, headquartered in India, is an integrated, research based, international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. It is ranked amongst the top ten generic companies worldwide. The Company has manufacturing operations in 11 countries with a ground presence in 49 countries and its products are available in over 125 countries. The Company is driven by its ambition to achieve US $5 Bn Sales by 2012 and be amongst the top five generic players worldwide. To translate these objectives into reality and to optimize value creation, the Company has adopted a multi-pronged strategy. Acquisition of generic brands overseas, strong emphasis on brand marketing in the US and Europe, entering high potential new markets with value added product offerings, are the major thrust areas. Successful business development transactions form a key component of it's business strategy.

In each of our partnerships, we strive to build enduring, mutually beneficial relationships that can produce positive results for both parties.

We are interested in sales and marketing partnerships and product acquisition opportunities in all the markets where we operate. We are exploring opportunities through Licensing and Alliances to draw maximum value from such arrangements. We continue to evaluate opportunities to add to our product basket, enhance our therapeutic presence and expand our distribution reach.

We are also interested in building winning drug discovery and development collaborations in the following therapeutic areas:

Anti-infectives Inflammation & Respiratory Metabolic Diseases Oncology

In addition, we have active R&D programs in oral controlled release drug delivery systems and are looking for suitable partnerships. We are also actively evaluating options for acquiring new technology platforms to develop differentiated high margin products.

Cipla
CIPLA Limited

Type Founded Headquarters Key people Industry Revenue Net income Employees Website

1935 Mumbai, India Y. K. Hamied (CMD), Chairman Pharmaceuticals Rs. 37.6 billion (~939M USD) (2006) Rs. 9.1 billion (2006) over 7,000 www.cipla.com

Cipla, originally founded as The Chemical, Industrial & Pharmaceutical Laboratories is a prominent Indian pharmaceutical company, best-known outside its home country for producing low-cost anti-AIDS drugs for HIV-positive patients in developing countries. The company was founded in 1935 by Khwaja Abdul Hamied, and its chairman today is Yusuf Hamied (b. 1936), the founder's eldest son.

Cipla and the Fight against HIV/AIDS in the Developing World

Today (2007), Cipla is the world's largest manufacturer of antiretroviral drugs (ARVs) to fight HIV/AIDS, as measured by units produced and distributed (multinational brandname drugs are much more expensive, so in money terms Cipla medicines are probably somewhere down the list). Roughly 40% of HIV/AIDS patients undergoing antiretroviral therapy worldwide take Cipla drugs. Ranked third in Generic market share statistics in South African Private Sector.

Because Indian law from 1972 has allowed no (end-product) patents on drugs, and provided for compulsory licensing, Cipla was able to manufacture medicines which enjoy patent monopoly in certain other countries (particularly those where large, multinational pharmaceutical companies are based). By doing so, as well as by making an executive decision not to make profits on AIDS medication, Cipla reduced the cost of providing antiretrovirals to AIDS patients from $12,000 and beyond (monopoly prices charged by international pharma conglomerates) down to around $300 per year. Today they are able to do so for under $150 per patient per year. While this sum remains out of reach for many millions of people in Third World countries, government and charitable sources often are in a position to make up the difference for destitute patients. The customary treatment of AIDS consists of a cocktail of three drugs. Cipla produces an all-in-one pill called Triomune which contains all three substances (Lamivudine, stavudine and Nevirapine), something difficult elsewhere because the three patents are held by different companies. One more popular fixed dose combination is there, with the name Duovir-N. This contains Lamivudine, Zidovudine and Nevirapine.

AHF Campaign

In August of 2007 Cipla was confronted by a US-based group known as AIDS Healthcare Foundation (AHF) with a well-funded campaign of full-page ads in various Indian newspapers suggesting Cipla was pricing an AIDS drug called Viraday higher in India than in Africa.[1]

In response to AIDS Healthcare Foundation's claims Cipla issued a short statement pointing out that the company had not sold a single pack of Viraday in Africa. It also underlined that Cipla sells its other AIDS drugs to the Indian government at the same prices it sells to Africa, and questioned AHF's agenda.[3] According to AHF and news reports, Cipla threatened a defamation lawsuit against the organization.

On August 21, 2007 the Indian Monopolies and Restrictive Trade Practices Commission (MRTPC) announced that it would look into Cipla's pricing and claims made by AHF. [2]

On September 1, 2007, The Economic Times of Delhi wrote that: It has now emerged that Aids Healthcare Foundation (AHF), the US-based NGO that accused Cipla of over pricing anti-AIDS drug, Viraday, in India is part funded by American anti-AIDS drug maker Gilead and the NGO's treasurer is a senior Gilead executive.

This is largely the reason why foreign and Indian NGOs such as Medicins Sans Frontieres (MSF), Delhi Network of Positive People (DNP+), Indian Network of Positive People (INP+), Sahara and others refused to be part of AHF's anti-Cipla campaign.

is also the only Indian company opposing Gilead's patent application for its blockbuster anti-HIV drug Viread in India. The hearing for the patent case of Viread is due in October. ... Says a head of an NGO, who did not participate in the anti-Cipla campaign: There is a conflict of interest in the campaign. AHF is funded by multinational pharma companies. A senior Gilead executive is one of the directors of AHF and the campaign choose to target Cipla for over pricing at a time when it is fighting Gilead's patent case in India. There is a discomfort and many civil society groups decided to stay away from the campaign.

Dr. Reddy's Laboratories

Dr. Reddy's Laboratories is India's leading pharmaceutical company with presence in over 100 countries. Dr Reddy's manufactures a range of products such as Active Pharmaceutical Ingredients, Generic & Branded Finished Dosages, Specialty Pharmaceuticals, and Biopharmaceuticals . Dr. Reddy's Laboratories was founded in 1984 by Dr Anji Reddy. In 1986, Dr. Reddy's went public and entered international markets with exports of Methyldopa. In 1987, Dr. Reddy's obtained its first USFDA approval for Ibuprofen API and started its formulations operations. In 1988, Dr. Reddy's acquired Benzex Laboratories Pvt. Limited to expand its Bulk Actives business. In 1990, Dr. Reddy's, entered a new territory when it, for the first time in India, exported Norfloxacin and Ciprofloxacin to Europe and Far East. In 1993, Dr. Reddy's Research Foundation was established and the company started its drug discovery programme. In 1994, Dr. Reddy launched a GDR issue of US$ 48 million. In 1995, the company set up a joint venture in Russia. In 1997, Dr. Reddy's became the first Indian pharmaceutical company to out-license an original molecule when it licensed anti-diabetic molecule, DRF 2593 (Balaglitazone), to Novo Nordisk. In 1998, Dr. Reddy's licensed anti-diabetic molecule, DRF 2725 (Ragaglitazar), to Novo Nordisk. In 1999, the company acquired American Remedies Limited, a pharmaceutical company based in India. In the year 2000, became the first Asia Pacific pharmaceutical company, outside Japan, to be listed on the New York Stock Exchange. In 2001, Dr. Reddy's Laboratories became India's third largest pharmaceutical company with the merger of Cheminor Drugs Limited, a group company. In 2002, Dr. Reddy's made its first overseas acquisition - BMS Laboratories Limited and Meridian Healthcare in UK. In 2003, Dr. Reddy's launched Ibuprofen, first generic product to be marketed under the "Dr. Reddy's" label in the US. In 2006, Dr. Reddy's achieved a revenue of US$ 1 Billion. In the same year, Dr. Reddy's acquired Betapharm- the fourth-largest generics company in Germany. Today, Dr. Reddy's Laboratories is leading pharmaceutical company in India in terms of turnover and profitability.

Products of Dr. Reddy's Laboratories

Active Pharmaceutical Ingredients (API): Dr. Reddy's Laboratories product list span 24 major chemistries including stereo-selective synthesis, cryogenics, hydrogenations and cyanations. It has filed 84 US DMFs, the highest in India and second highest in the world.

Custom Pharmaceutical Services: Dr. Reddy's executes cost-effective and time-bound projects for its customers, and provides them cGMP-compliant products manufactured in FDA-inspected, ISO-certified facilities.

Generic Dosages: Dr. Reddy's Lab is a leading generic drugs manufacturer. It is the fourth largest player in Germany after the acquisition of betapharm. The company has expertise in customer-specific packaging, compliance packaging, anti-counterfeit packaging, and has won several awards globally for its packaging efforts, including the Asia Star, AmeriStar and WorldStar awards . Branded Dosages: Dr. Reddy's brands such as Omez (Omeprazole), Nise (Nimesulide), Stamlo (Amlodipine), Ciprolet (Ciprofloxacin), Enam (Enalapril) and Ketorol (Ketorolac) are leaders in their category in several countries.

Discovery Research: Dr. Reddy's is actively involved in drug-discovery and clinical development programs.

Specialty Pharmaceuticals: In the field of speciality pharmaceuticals, Dr. Reddy's deals in deals acquired proprietary technologies, internally developed proprietary drug-delivery platforms, and current internal compounds under pre-clinical and clinical development.

Biopharmaceuticals: Grafeel (Filgrastim) was the first biologics product by Dr. Reddy's to enter the market. The company's second product Reditux (Rituximab) is the first biosimilar monoclonal antibody to be developed and launched anywhere in the world.

Major Achievements of Dr. Reddy's Laboratories:

Dr. Reddy's is the 1st Asia Pacific pharmaceutical company, outside Japan to be listed on the New York Stock Exchange.

Dr. Reddy's biologics product Reditux (Rituximab) is the first biosimilar monoclonal antibody to be developed and launched anywhere in the world.

NICHOLAS PIRAMAL INDIA LIMITED

People Philosophy

Nicholas Piramal is in many ways a unique organization. With a long history of Mergers and Acquisitions, NPIL is an amalgam of many cultures, most of them being multi-national in nature. As a result the company has develop its own Nicholas Way - a best practices programme that imbibes the best of all cultures and creates its own - one that reflects unity in its diversity. Because of a conscious M&A strategy over the years, the harmonization of cultures at the company has been challenge that we have successfully met. It is a story that has been heralded in the Indian pharma industry, wherein the Nicholas Piramal skills at efficiently integrating all acquired companies at the people, finance and manufacturing levels.

Nicholas Piramal's strongest attributes are the unwavering focus on ethics, transparency, corporate culture, stakeholder relationships, contribution to society and a commitment to growth!

Nicholas Piramal is a company that dares to dream the impossible and motivates and empowers its 4,000 strong team to go on and achieve it. It is a work culture that is focused on high performance, innovation, entrepreneurship and empowerment, based on mutually beneficial personal development that understands and helps employees manage their dreams and goals.

A key element of Nicholas Piramal's success is the empowerment of its people, with a strong performance and consequence management element, where the company uses a proprietary formula to convert employee Key Result Areas into a performance-based pay system, with parity with industry pay structures and a stress on internal equity with all employees.

The HR system is designed with transparency and feedback as the primary pivots of employee evaluation and growth. It identifies leaders who can be thrown up quickly through a combination of self and sponsored learning. Organisational learning and study opportunities are provided by the company through dedicated, regular training programmes run throughout the year for all members of the sales, marketing and research teams.

Given the fact that the company is in the intellectual capital driven business of pharmaceuticals, Nicholas Piramal lays great stress on Knowledge Management and development as a Knowledge-based company. Nicholas Piramal, as a consequence of its HR practices, has attracted some of the finest talent in industry. Its senior management team of 41 comprises 39 people who are Doctorates, MBAs, CAs or have post-graduates from some of the best institutes in India and across the world. Their work experience also spans some of the top global and Indian firms in their industry.

In keeping with the M&A ethos, Nicholas Piramal has built a culture where diversity thrives, thanks to its skill of integrating acquisitions quickly and efficiently, contrary to most practices in industry. People from acquired companies at all levels are able to quickly craft and define a career process and follow it up very successfully. The company has several such examples in Finance, Sales and Marketing and Manufacturing who are now at top or senior management positions.

Within its acquired companies Nicholas Piramal has set up a culture wherein talent at all levels with leadership potential can be spotted quickly and potential leaders presented with an opportunity to grow. This can be seen from the fact that the attrition levels within acquired companies are largely lower than industry norms.

At Nicholas Piramal with its accent on entrepreneurship, the company has recently delayered management to create growth and entrepreneurial opportunity. Entrepreneurial spirit among middle and senior management is encouraged with high levels of empowerment. Communication is also a priority for top management. The company's Chairman regularly shares successes and triumphs with the company as a whole through personalized meetings and digital house-journals, which reach to more than 3,000 employees

Cadila Healthcare
Cadila Healthcare Limited
Image:Cadila Healthcare.jpeg Type Founded Headquarters Key people Industry Revenue Net income Employees Slogan Website Public 1954 Ahmedabad, India Pankaj Patel, Chairman Pharmaceuticals INR 15 billion (2006) INR 1.7 billion (2006) 4000 (2006) dedicated to life http://www.zyduscadila.com/

Cadila Healthcare is an Indian pharmaceutical company headquartered at Ahmedabad in Gujarat state of western India. The company is the fifth largest pharmaceutical company in India, with US$290m in turnover in 2004. It is a significant manufacturer of generic drugs.

Contents
[hide]

1 History 2 Products 3 Active pharmaceutical ingredient plants 4 Formulation plants 5 Corporate control 6 References 7 External links

History
Cadila Laboratories was founded in 1952 by Shri Ramanbhai Patel (1925-2001), formerly a lecturer in the L.M. College of Pharmacy, and his business partner Shri Indravadan Modi. The company evolved over the next four decades into one of India's established pharmaceutical companies.

In 1995 the Patel and Modi families split, with the Modi family's share being moved into a new company called Cadila Pharmaceuticals Ltd. and Cadila Healthcare became the Patel family's holding company. Cadila Healthcare did its IPO on the Bombay Stock Exchange in 2000. Its stock code on the Bombay exchange is 532321.

In 2001 the company acquired another Indian pharmaceutical company called German Remedies. On June 25, 2007, the company signed an agreement to acquire 100 per cent stake in Brazils Quimica e Farmaceutica Nikkho do Brasil Ltda (Nikkho) for around 26 million dollars.

Products
From nine pharmaceutical production operations in India as well as a major R&D operation Zydus Cadila develops and manufactures a large range of pharmaceuticals as well as diagnostics, herbal products, skin care products and other OTC products. The company also makes food

Active pharmaceutical ingredient plants The company makes active pharmaceutical ingredients at three sites in India:

Ankleshwar plants - Zydus Cadila's plant complex at Ankleshwar in Bharuch District of Gujarat, has been been producing drug material since 1972. There are around 10 plants in the complex, which is ISO 9002 and ISO 14001 certified as well as FDA Approved. Total plant capacity at Ankleshwar is around 180 million tonnes. Vadodara plant - Zydus Cadila's plant at Dhabhasa, in Vadodara District's Padra taluka (in the eastern part of the district) in Gujarat, was commissioned in 1997 by a company called Banyan Chemicals, and acquired by Zydus Cadila in 2002. The plant has a 90 million tonne capacity. It is an FDA-approved facility that is also approved to WHO GMP guidelines.

Patalganga plant - Zydus Cadila acquired an API plant at Patalganga in Maharashtra state, 70 km from Mumbai, in the 2001 German Remedies deal. This plant operates to WHO GMP standards.

Formulation plants
The company operates formulation plants at six locations: Moraiya plant - Zydus Cadila's formulation plant at Moraiya in Sanand taluka on the outskirts of Ahmedabad is the largest formulation plant in India. It plant became Food and Drug Administration (FDA)-approved in 2004/2005. The plant makes tablets, capsules, and soft gel capsules as well as injectable drugs in both sterile liquid and lyophilized form. Zydus Cadila also runs a large R&D operation at Moraiya; Vatwa plant - Zydus Cadila's plant at Vatwa, an industrial suburb of Ahmedabad, makes nutraceuticals. The plant was acquired with German Remedies; Changador plant - Zydus Cadila's plant at Changodar, 20 kilometres from Ahmedabad on the city's outskirts, manufactures fine chemicals. Zydus is current constructing a facility at Changodar to make vaccines for hepatitis B and rabies.

Navi Mumbai plant - This operation, at Navi Mumbai in Maharashtra, is a 50/50 joint venture with Germany's Altana Pharma AG, makes intermediates of the drug pantoprazole. Goa plants - The company's plants at Ponda in the southern Indian state of Goa do formulation work as well as manufacture oncology drugs and a herbal laxative branded Agiolax based on Psyllium seeds. Baddi plant - In 2004 Zydus commissioned at formulation plant at Baddi, in Himachal Pradesh state of northern India. The Baddi plant makes solid oral pharmaceuticals.

Corporate control

Zydus Cadila's major shareholder remains the Patel family. Pankaj Patel (1951 - ), son of the founder, is CEO. In 2004 Pankaj Patel was included by Forbes magazine in its annual List of India's richest people. Forbes estimated Patel's net worth at US$510m, making him India's 26th richest person. However in 2005 Patel dropped off the Forbes list due to a fall in the stock price of Cadila Healthcare. Moreover, there is a team of 9 Senior level executives - Known as The Executive Committee, who are heads of different operations look after the overall management processes. None of the members except Pankaj Patel are on Board of Directors.recently in september 2007 cadila in a joint venture opened a pharmaceutical plant in ethiopia.