#1सत्यमेव जयते GOVERNMENT OF GUJARAT Pharmaceuticals Sector Profile#2India Scenario#3Overview + सत्यमेव जयते GOVERNMENT OF GUJARAT The Indian pharmaceutical sector ranks 3rd in the world in terms of volume (10 % of the global industry) and 14th in terms of value Over 60,000 generic brands across 60 therapeutic categories and more than 500 different APIs are manufactured. India contributes the 2nd largest share of pharmaceutical and biotech workforce in the world, after China. The other leading countries are USA & Brazil. Per capita sales of pharmaceuticals expanded at a CAGR of 17.6 per cent during 2008 to 2016 to US$ 33 in 2016 due to economic growth and increasing awareness of generics amongst the consumers. The total market size of the India Pharma Industry is expected to reach US $ 100 Billion by 2025. India's cost of production is nearly 33 per cent lower than that of the US with labour costs 50-55 per cent cheaper than in Western countries. The cost of setting up a production plant in India is 40 per cent lower than in Western countries. Source: IBEF, Business Standard, ASI 3#4Key Statistics-Pharmaceuticals Trade in Indian Pharmaceutical Sector (US$ bn) सत्यमेव जयते GOVERNMENT OF GUJARAT Growth in Indian Pharmaceuticals Industry (US$ bn] 16.9 16.6 14.5 14.9 12.6 10.1 4.4 4.6 3.6 3.7 3.7 3.7 34.1 29.77 28.53 27.57 24.52 22.46 20.95 FY12 FY13 FY14 FY15 FY16 FY17 E Export Import In FY17, India exported pharmaceutical products worth US$ 16.8 billion, with the number expected to reach US$ 40 billion by 2020. During April - November 2017, India exported products worth US$ 8.49 billion. Source: IBEF FY11 FY12 FY13 FY14 FY15 FY16 Revenue FY17 E The market witnessed growth at a CAGR of 5.64 %, during FY11-16, with the market increasing from US$ 20.95 billion in FY11 to US$ 27.57 billion in FY16. The revenues is estimated to have grown by 7.4 % in FY17. 4#5Key Statistics-Domestic market Indian domestic market was valued at US $ 18.01 Bn in FY 17. सत्यमेव जयते GOVERNMENT OF GUJARAT Domestic demand has steadily increased over the years due to increase in household income, improvement of medical infrastructure & penetration in the country. In April 2018, a high-level task force was constituted to create a roadmap for increasing domestic production of APIs. Currently, India imports over 60 per cent of its APIs from other countries. Segmentation of the Market Segmentation of the Market 29% 16% ■ Anti-infectives ■ Vitamins, Minerals ■ Anti-diabetic 13% 21% 11% 7% 9% 8% ■Cardiovascular (CVS) ■ Gastro-intestinal Respiratory ■ Others 9% 70% Pain/analgesic ■ Generics ■ Over the Counter Medicines ■ Patented Drugs Source: Indiastat, Ministry of Commerce, Government of India, Invest India, IBEF 5#6Key Statistics-Exports सत्यमेव जयते GOVERNMENT OF GUJARAT Biggest provider of generic medications which account for 20 percent of global exports concerning volume. India ranks among the top ten global exporters with exports totaling US $ 16.1 Bn in FY 17. Indian drugs are exported to more than 220 countries across the globe India is also the largest vaccine producer in the world and supplies 80 per cent of the anti retroviral drugs to fight AIDS globally. India's Exports of Pharmaceuticals to World 12.70. (US $ Billion) 3.40 ■Bulk Drugs and Drug Intermediates ■ Drug Formulations and Biologicals Source: Indiastat, Ministry of Commerce, Government of India, Invest India Top 10 Countries 237 232 328 350 350 382 400 496 688 ■USA-5626 5,626 ■ UK-688 ■South Africa -496 ■ Nigeria -400 ■Russia -382 ■ Brazil -350 ■Germany -350 ■ Kenya -328 ■ Belgium -237 ■Australia -232 6#7Medical Devices-India सत्यमेव जयते GOVERNMENT OF GUJARAT India's Domestic Market (US $ 5.2 Billion) 25% 3% 7% 31% 9% 10% 17% Diagnostic Imaging ■ Consumables ■ IV Diagnostics ■ Patient Aids ■ Orthos and Prosthetics ■ Dental products ■ Others(Patient Monitor, ECG, etc) Market Overview India has about 750-800 medical device manufacturers in the country, with an average investment of Rs 170-200 million and an average turnover of Rs 450-500 million. Among the top 20 global medical devices market and is the 4th largest medical devices market in Asia after Japan, China and South Korea Growth Drivers & Government Support O India's population has crossed 1.32 billion and with the ageing population to increase to 6% by 2021, there will be a greater demand for better health care facilities and medical devices. Periodic renewal of licenses for manufacturing and imports will not be required further. A single window mechanism for statutory clearances which need to be obtained for the manufacturing units has been developed. Interest subsidy for MSMEs, concession on power tariffs, seed capital and minimum or zero duty on raw materials have been proposed in the Draft National Medical Device Policy-2017. With the new Goods and Services Tax regime, the new tax rate is flat 12%. which earlier use to be more than 13%. It helps to achieve lower costs of manufacturing Source: Make in India 7#8Growth Potential of Indian Market Estimated Growth projected in India by 2025 (US $ Bn) सत्यमेव जयते GOVERNMENT OF GUJARAT 120 100 80 60 60 60 40 40 100 34.1 100 50 50 5.2 3.5 0 Indian Pharma Industry Biotech Industry Medical Devices 2017 2025 20 20 Source: IBEF, Make in India 8#9Key Statistics-FDI FDI in Pharmaceutical Sector (US $ Billion) 0.21 3.23 1.50 1.28 1.12 0.35 7.90 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Source: Indiastat, Ministry of Commerce, Government of India, Invest India सत्यमेव जयते GOVERNMENT OF GUJARAT • There has been a tremendous increase in FDI in the FY 16-17 due to the liberalization from June 2016. Pharmaceutical companies can now invest 100% for greenfield & up to 74% for brownfield projects under automatic route. Major Companies Country Company Johnson & Johnson USA GSK United Kingdom Pfizer USA P&G USA NIPRO Japan AstraZeneca United Kingdom 9#10Government of India Initiatives Industry infrastructure Reduction in approval time Duty Exemptions Union Budget 2018-19 Online Pharmacy Policy National Intellectual Property Rights (IPR) Policy 2016 सत्यमेव जयते GOVERNMENT OF GUJARAT The government has planned to set up 6 pharma parks at an investment of about US$ 27 million Plans to set up mega bulk drug parks in order to reduce dependency on raw material imports. The Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. NOC for export license is being given on a state level under ease of doing business for faster approval Full exemption from excise & custom duty is being provided for HIV/AIDS drugs and diagnostic kits supplied under National AIDS Control Programme funded by the Global Fund to fight AIDS, TB and Malaria (GFATM) The National Health Protection Scheme is largest government funded healthcare programme in the world, which is expected to benefit 100 million poor families by providing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for secondary & tertiary care hospitalisation. The Government of India plans to set up a US$ 640 million venture capital fund to boost drug discovery and strengthen pharmaceutical infrastructure. Government plans to set up an electronic platform to regulate online pharmacies Legal and Legislative Framework for strong and effective IPR laws, which balance the interests of rights owners with larger public interest Strengthens the enforcement and adjudicatory mechanisms for combating IPR infringements. 10#11Gujarat Scenario#12Key socio-economic indicators HV 鳳 !ii!i! Vii!i! Source: Gujarat Socio-Economic Review 2017-18 1 USD = 65 INR सत्यमेव जयते GOVERNMENT OF GUJARAT 6% of India's Geographical Area 1,96,000 sq. km. 5% of India's population 60.4 million 8% of India's GDP INR 984,598 crore (~ USD 151 billion) at Constant (2011-12) Prices 40% of India's Port Cargo handled by Gujarat ports 0 43% population lives in urban areas 0 More than 20% of India's exports 12#13O Robust infrastructure facilitates A Road 156,177 km of well- surfaced roads providing excellent connectivity across the State Rail Railway route length 5259 km On-going Metro projects in Ahmedabad, Gandhinagar, Surat Upcoming HSR* between Ahmedabad & Mumbai 36% of DFC is in Gujarat • メ Airports 17 operational airports and airstrips with 2 International airports India's largest airport coming up in Dholera † Power > 30 GW installed power generation capacity providing 24x7 un- interrupted supply Connectivity Tele-density ('00 popl.): 113.70 among the highest in India • Peak demand of about 15 Internet subscribers: 27.3 million GW Water Grid State-wide 120,769 km long water supply grid Source: Gujarat Socio-Economic Review 2017-18; GUJSAIL; TRAI report as on 31st March 2017, *HSR - High Speed Rail • सत्यमेव जयते GOVERNMENT OF GUJARAT Ports • 48 large ports handling over 450 million tonnes cargo (2016-17) 40% of India's Port Cargo handled by Gujarat ports • Natural Gas Grid ⚫ 2600 km operational • pipeline gas grid network passing through 25 districts 25 MMSCMD transmitted through grid 13#14Gujarat: The market leader in India Investment in US $ Billion (2016-17) Total Output in US $ Billion (2016-17) 17.1, 83% 3.4, 17% ■ Gujarat ■ Rol 698 10.5, 31% 23.6, 69% ■ Gujarat ■ Rol Manufacturing Licenses in Gujarat 556 Allopathic ■ Ayurvedic 3099 ■ Cosmetics 1st सत्यमेव जयते GOVERNMENT OF GUJARAT 559 WHO GMP compliant manufacturing units Diagnostic reagent (Malaria) 1st manufacturer to obtain product prequalification from WHO World's first biosimilar, 1st 'Adalimumab' was manufactured in Gujarat Largest producer of 1st contraceptive pills in the world World's Isoniazid (used for 80% treatment of tuberculosis) is produced in Gujarat of India's machinery for 40% pharma sector is manufactured in Gujarat Source: DNA, FDCA Gujarat, IBEF, ASI, Pharmexcil 14#15Growth of Pharmaceuticals in Gujarat 6.0 5.0 4.0 3.0 2.0 1.0 Exports in US $ Billion 5.2 12.0 Total Output in US $ Billion सत्यमेव जयते GOVERNMENT OF GUJARAT 10.5 6.7 10.0 8.0 6.0 السة اس 3.6 3.1 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 4.0 2.0 2013-14 2014-15 2015-16 2016-17 Source: ASI, FDCA Gujarat 15#16Growth Drivers for Gujarat's pharmaceutical industry सत्यमेव जयते GOVERNMENT OF GUJARAT Infrastructure: The growth of Gujarat's pharmaceuticals industry has been cluster-driven with 4 major clusters. There are 5 Special Economic Zones dedicated for Pharmaceutical exports from the state. 3 New Industrial parks are under development. Vast Talent Pool: A skilled workforce with high managerial and technical competence is readily available in Gujarat with over 4,500 B Pharma & 10,000 MBA seats in Gujarat. Generics Drugs Market: Wide spread awareness of generics among people and government increasing access to quality products through Jan Aushidhi stores which promotes generics to cater to masses. Approximately 500 such stores are operational in the state. Government Policy: Several disease eradication programmes and a universal healthcare programme have fueled the demand for drugs. Penetration of pharmacies in rural areas has opened up a new market. Availability of R&D Facilities: With the increasing investments in Research and Development (R&D) sector, introduction of new products and medicines development, has boosted research-based growth. 16#17Pharma Clusters in Gujarat Mehsana Ahmedabad cluster Kandla Vadodara cluster Rajkot Porbandar Products across the regions Ahmedabad • APIS Formulations Biological Products Contract Manufacturing Bharuch & Ankleshwar APIS Vaccines Formulations Vadodara सत्यमेव जयते GOVERNMENT OF GUJARAT Formulations Bio-generics APIS Vapi & Valsad • . Formulations · Device and Diagnostic SEZS SIRS Vapi Valsad cluster Source: FDCA, IBEF Bhavnagar Bharuch and Ankleshwar cluster Benefits in the Clusters apart from Common Infra Raw Material Availability Bulk drugs, Excipients Capsules, Preservatives Ampules, Glass vials Financial Institutes Support Institutions Academic (Manpower) Contract research Laboratories Industrial associations • IDMA-GSB · SIDBI ICICI . SBI . MDMA • ADMA 17#18Export opportunities from Gujarat सत्यमेव जयते GOVERNMENT OF GUJARAT Gujarat exported pharmaceutical goods worth US $ 5.2 Bn during 2016-2017 with USA being the major destination. The state has 559 WHO compliant manufacturing units out of the 1200 units across the country which is the highest amongst all states. 42.63 Top 10 Countries US $ Million* 39.61 39.05 44.77 45.97 49.52 75.71 ■USA-1,043 ■ UK-136 ■ Germany -77 ■ Brazil -75 ■ Nigeria - 49 ■ Netherland -45 International Regulation Compliant Manufacturing units ■WHO ■TGA 62 ■US FDA MHRA ■PICS 25 29 18 77.82 1,043.70 ■ France -44 136.34 ■ South Africa -42 ■Italy -39 ■ Philippines -39 Source: Indiastat, Ministry of Commerce, Government of India, Invest India; * Data of major companies only 559 18#19Medical Devices-Gujarat Upcoming Medical Device Parks in Gujarat GIDC, Sanand (37 Acres) Vinstron, Dahej (350 Acres) Setting up a unit in a medical device park with in- house high investment scientific facilities can help reduce the cost of manufacturing by 40- 50%. Source: Make in India, PharmBiz, Vintron Infra, GIDC, DGCIS Overview सत्यमेव जयते GOVERNMENT OF GUJARAT Gujarat as the state has the largest number of 146 licensed medical device companies as against 284 in the entire country NIPER Ahmedabad is being developed as a National Centre of Excellence for medical devices. The value of medical and scientific instruments exported from Gujarat crossed US$ 100 million in 2017. High market share of India with 78% of Cardiac stents 60% of Orthopedic implants 50% of Intraocular lenses Major Companies with manufacturing facilities Siemens Bayer AG Contacare • Meril Life Sciences • Invent Bio-Med Sahajanand Technologies • 19#20State Government Initiatives Promotion of generic drugs by giving them preference in government purchases. Over 500 generic drug stores have been opened across the state. 金 Development of three pharma sector parks across the state Source: DNA Establishment of Gujarat Genomics Initiative, Genetic Diagnostic centers and Gene Banks Single window portal for issuance of sales license and product license implemented by FDCA सत्यमेव जयते GOVERNMENT OF GUJARAT 20 20#21Educational Infrastructure सत्यमेव जयते GOVERNMENT OF GUJARAT Provisional Intake Capacity of Pharmacy Colleges in Gujarat was approximately 4530 seats in 2017 Leading Institutes LM College of Pharmacy Institute of Pharmacy - Nirma University Anand Pharmacy College Faculty of Pharmacy, MS University B. K. Modi Government Pharmacy College National Institute for Pharmaceutical Education & Research LMCP Location Ahmedabad Ahmedabad सर्व Anand Vadodara Rajkot Gandhinagar THE MAHARAJA सन्दु निरामयः SAYAJIRAO UNIVER RO सत्यं शिवं सुन्दरम् B.V. Patel Perd Center Source: KPMG Research Ahmedabad, NIPER नाईपर ni 8.K.MODY GOVERNMENT PHARMACY MACY COLLEGE RAJKOT-3 PERD Centre 21#22Research organizations Company Piramal Pharma Solutions Fisher Clinical Services Synchron Research Services Cliantha Research Limited Lambda Therapeutic Research Limited FTF Pharma Accuprec Research Labs 40% of India's Contract research organizations are based in Gujarat Services Offered सत्यमेव जयते GOVERNMENT OF GUJARAT Early stage drug discovery services for Synthetic Chemistry, Medicinal Chemistry, In-vitro Screening and ADME Services, Analytical Support Services, Chiral Purification & Scale up EU GMP certified facilities for clinical trial packaging from blinding to primary and secondary packaging, comparator sourcing, labeling, storage and distribution of clinical supplies Bioavailability/bioequivalence, Pharmacokinetic/Pharmacodynamic studies, Dermatopharmacokinetics, Bioanalysis Statistical analysis & Data Management, Pharmacovigilance Integrated clinical offerings in Early Phase (Phase I/IIa), Late Phase (Phase II-IV), Bioequivalence (BA/BE), Clinical Endpoint Trials, Bioanalytical, Biosimilars, Dermatology, Respiratory, Allergy, Biometrics, and Personal Healthcare service Bioanalytical, BA/BE, (Phase I), Late Phase (Phase II-IV), Biometrics and Data Management, Pharmacovigilance, Medical Imaging, Bio-similar, Medical & scientific writing and Quality assurance Identification of new products, Regulatory, Non infringing & IP strategy, Bioequivalence & clinical trials Analytical Testing, Biotechnological, Microbiological, Biocompatibility Study Of Medical Device, Preclinical & Toxicological, Phytochemical, Food Testing, Formulation & Development, Dyes & Pigment Testing, Herbal Formulation Development, Stability Testing, Clinical Regulatory Dossier Preparation & Ipr Management 8 BA/BE centers have been approved in the state. 22 22#23State Government Incentives#24State Government Assistance for Micro, Small and Medium Enterprises Assistance of Capital Investment Subsidy @ 10% and @ 15% on loan amount in Municipal Corporation areas and in areas other than Municipal Corporation areas respectively Incentives under the Industrial Policy 2015 Assistance for Interest Subsidy @ 5% and @7% for period of 5 years in Municipal Corporation areas and in areas other than Municipal Corporation areas respectively Assistance for Venture Capital Assistance to raise promoter contribution in the form of equity or loan through GVFL सत्यमेव जयते GOVERNMENT OF GUJARAT Assistance for Quality Certification 50% of capital cost for installing Enterprise Resource Planning (ERP) system, for obtaining ISO certification, for obtaining WHO GMP, for testing equipment and machinery required Assistance for Technology Acquisition Grant at the rate of 50% of cost of technology acquisition Assistance for Patent Registration 75% of expenditure incurred for obtaining patents Assistance for Saving in Consumption of Energy & Water 75% cost of energy/water audit conducted in a unit & 25% of cost of equipment Source: Resolution No. SSI-102014-924840-CH; Date. 19.01.2015 & DNA 24#25Partners in our success Zydus ated life dedicated to CADILA SUN PHARMACEUTICALS LIMITED gsk Otsuka INTAS Claris Meril सत्यमेव जयते GOVERNMENT OF GUJARAT G Glenmark A new way for a new world ap ajanta pharma limited P&G dishman More to Life torrent NIVEA PHARMA ✓ Alembic Baxter Ipca TELI LUPIN 25 25#26Investment Opportunities 1 APIS 2 3 Formulations सत्यमेव जयते GOVERNMENT OF GUJARAT Currently India imports over 60 per cent of its APIs from other countries. The government aims to produce 100% of the bulk drugs domestically and hence offers multiple incentives & support for the same. The state is coming up with a mega park for API manufacturers. Increased demand for generics due to public healthcare reforms in US and Latin countries has led to a huge demand supply gap. Gujarat's expertise in manufacturing of low cost generics & well channeled export infrastructure can be leveraged here to the fullest. Medical Devices Rising income levels, ageing population, increased prevalence of lifestyle-related diseases, and the government's commitment to provide universal healthcare services at a reasonable cost to both rural and urban population has led to a steep demand for medical devices within the country. There are 2 medical device parks in Gujarat which are under development. Globally, contract research is a high growth segment led by increasing outsourcing activities of pharma MNCs. There are high opportunities opening up for bio-informatics and clinical data management centers which can boost R&D. 4 Contract 5 Research 1 Organizations Pharmaceutical Machinery ✓ Gujarat's strong and well established engineering sector can be leveraged to produce pharmaceutical machinery, whose demand is being fueled by strong growth prospects of the pharmaceutical exports segment and growing demand from the domestic market. 26 26#27Export Opportunities to USA Market सत्यमेव जयते GOVERNMENT OF GUJARAT USA is by far the largest pharmaceutical market in the world with a value of approximately 339 Bn with 25% of it being imports. India ranks 5th amongst the top 5 countries to export pharmaceuticals to the USA. India has 2nd largest number of USFDA-approved manufacturing plants outside the US with 546 sites & 2,633 FDA- approved drug products. Gujarat has 62 USFDA-approved manufacturing sites. India supplies generics at lower prices. Though generics are estimated to make up to 80% of U.S. prescriptions, they only contribute 22% of total U.S. spending on pharmaceuticals. The generics market is US$ 70-80 billion. Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from USFDA in 2017. Exports to USA shall get a boost as branded drugs worth US$ 55 billion will become off-patent during 2017-2019. Top 5 Pharmaceutical Markets of the World (US $ Billion) 45.82 37.15 Top 5 Pharmaceutical Exporters (Total Market US $ 92.5 Billion) 86.77 339.69 94.02 ■ USA ■ Japan ■ China ■ Germany ■ France Source: Indiastat, Ministry of Commerce, Government of India, Invest India, IBEF, DGCIS 6 6 15.2 9.4 14.5 ■ Ireland ■ Germany ■ Switzerland ■ Israel ■ India 27 24#28Thank you