INDIAN PHARMA IS BEING SQUEEZED – AND IT’S BAD NEWS FOR DRUG ACCESS IN DEVELOPING COUNTRIES

Article by Thankom Arun and Reji Joseph

(Originally published at The Conversation. Reposted at Naked Capitalism (.com))

Commentary by Charles H. Sulka

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In this article, the authors endorse America’s inevitable foreign policy decision to disengage from China in trade. They propose that America embrace India as a principal supplier of wholesale pharmaceuticals and precursor chemicals, the focus of this op-ed piece. They warn that without such a move China could soon dominate the pharmaceutical markets in both countries, and, indeed, the world. There is only one hitch — such a move implies a sound industrial policy on the part of both countries. Industrial policy is something which is anathema to America’s political apparatchiks — free traders, globalists, neoliberals, and neoconservatives.

The authors claim that dominance in the pharmaceutical industry is part of China’s plan for world economic domination. China has not made a secret of their comprehensive economic program, or of their ambitions to dominate the emerging new economic order. The threat must be taken seriously.

These economists point out that America is a large importer of wholesale drugs (which are then sold to Americans at inflated prices by the unscrupulous U.S. pharmaceutical industry, something the authors fail to mention.) In their view, the problem has a simple solution: America should buy wholesale drugs from India. The exorbitant profits the Indian pharmaceutical industry would reap from inflated drug prices in America (Indian companies get their share in the bounty) would subsidize the Indian pharmaceutical industry, giving it the ability to supply Africa and other undeveloped regions with low-cost pharmaceutical drugs.

The writers point out that communist China’s state-controlled pharmaceutical industry poses a growing threat that can be countered by India’s free-market economic model. The reader is reassured that India does not pose such a threat to free market economics because India’s pharmaceutical manufacturers make all of their own marketing decisions. [The writers really cannot be faulted for promoting their home country and for showing how well India fits into the new international economic order.] This is a transparent attempt to curry favor with the globalists, to promote India as an alternative to east Asian ‘off-shore’ suppliers.

Perish the thought of offending the globalists and their vision of the New World Order. Instead of being seen as communist sympathizers, the authors prefer to be seen as globalists. [I really do hate politics.]

The alternative — America moving toward self-reliance by developing its own wholesale pharmaceutical industry serving the American people with better products and fair pricing — is never even suggested. Autarky scares the living daylights out of the globalists.

These writers see the foreign policy implications in the international pharmaceutical business. In this article they play to Americans’ fear of China. They obviously favor improving the lives of those living in developing nations and they see India as playing a leading role in this — not out of altruism, but purely for profit motives. Their logic is not unsound, and their politics is not duplicitous. Their views must be taken into account when evaluating the situation.

But their views are not necessarily congruent with America’s best interests. Why should the beleaguered American people be burdened with subsidizing cheap pharmaceuticals in Africa by paying higher prices for drugs here in America? There are many ways America could work to improve the quality of life (especially medical care) in developing nations — ways that are not so convoluted … ways that do not discourage America from becoming more self-reliant by fostering this country’s own discount pharmaceutical industry … ways that do not relinquish the citizens’ power over their own economy by turning control of the market over to internationalists and foreign governments.

In terms of foreign policy, America must disengage from China — that is a given. As America’s leaders have sold out this nation to the communists — and with the globalists firmly in control of the world’s economy — the process of disengaging from China so that America can rebuild will be excruciating. From a strategic standpoint, it is very likely that a ‘pivot to India’ will be advisable.

It is true that India does not pose any near-term national security threat to America. Moreover, there is no reason to think that India will embrace communism or totalitarianism in the near future; democracy is thriving in India. A closer alliance between America and India looks to be in the cards, so to speak. Read this article thoughtfully, and keep in mind the authors’ own agenda.

Foreign policy decisions will become increasingly reliant upon public sentiment, as populism flourishes and the peoples of the world take back control over their lives and reign in on the corrupt governments that oppress them. As Americans, we need to take measures to achieve these objectives in America first. There is a groundswell of sentiment among the America people that we can undo the damage to the economy wrought by America’s incompetent and corrupt politicians and the economic hucksters who have bankrupted the nation. We can make America a productive nation again. But to do this, we need to bring home every job, every industry, that the moronic ruling class has sent into exile. It will not be an easy task! America will need reliable allies and trading partners. India has a lot to offer America in this regard.

(CHS 11-01-2020 2035 -0500)

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Indian Pharma is Being Squeezed – and It’s Bad News for Drug Access in Developing Countries

Posted on November 1, 2020 by Jerri-Lynn Scofield

Jerri-Lynn here. The key role Indian pharma plays in ensuring access to low-cost drugs for developing countries is especially important during the age of COVID-19, when big pharma is doing its best to promote high-cost, proprietary vaccines and treatments, regardless of their lack of history and questionable efficacy. Research into using low-cost generics is not part of the game plan. And the price of drugs is not just a concern for developing countries and is also not just limited to the pandemic,

By Thankom Arun, Professor of Global Development and Accountability, University of Essex, and Reji Joseph, Associate Professor of Economics, Institute for Studies in Industrial Development. Originally published at The Conversation.

India’s pharmaceutical industry is renowned for selling medicines to the world at reasonable prices, especially developing countries. This has helped Africa in its fight against HIV/Aids, for instance. Such endeavours have earned India a reputation as the “pharmacy of the world”.

Now, the advantages that have enabled India to play this role are in danger of being eroded. Not only would this be bad news for India’s economy, it could make it harder for developing countries to access the medicines they need – threatening the UN Sustainable Development Goals in the process.

India’s challenges

India is the world leader in generic medicines, which contain the same ingredients as the originator version, and go on the market after the original patent has expired. India’s top pharma firms include Cipla, Aurobindo Pharma, Lupin, Dr Reddy’s Laboratories and Sun Pharmaceutical Industries.

One challenge is coming from China, which has increasingly been exporting active pharmaceutical ingredients in recent years. Indian companies have managed to turn this into an opportunity by using these ingredients to supply medicines at reasonable prices while reducing their production costs and R&D spend.

But China is also expanding into drug formulations. By our calculations, China’s global share of formulations exports trebled from 0.4% in 2009 to 1.2% in 2018, while India’s doubled over the same period from 1.5% to 3.6%. Remarkably, 36% of China’s exports are to the EU and North America, where regulations are the most stringent, compared to 19% in 2009. Beijing’s “Made in China 2025” policy has identified pharmaceuticals as one of its strategic industries.

China’s rising share of formulations has been aided by improved standards that appear to be making the world less apprehensiveabout Chinese medicine quality. Notably, the China Food and Drug Administration issued guidelines in 2013 to make generic medicines bioequivalent to the originals, and in 2016, the government made them mandatory.

Chinese pharma has also placed much emphasis on using AI and genetics for developing new drugs. This enables firms like XtaIPi to identify thousands of molecules which could be used to treat a disease with fewer resources and time.

One silver lining is that China is proposing a new regulation that would give its firms exclusive control over their clinical test data. This sort of rule is favoured by the “innovator” pharma industries that we see in the west, and is opposed by generic pharma industries like India’s. It indicates where Chinese pharma might be headed, and may drive up its production costs for formulations – thus potentially benefiting India.

Another challenge to India is wealthy countries protecting their pharma industries to ensure drug security. In August, President Trump issued an executive order that called for the elimination of drug imports, both as active ingredients and formulations. France and Germany look to be heading in a similar direction.

If the US order is strictly adhered to, it will heavily affect Indian pharma. More than half of India’s pharma sales are from exports, and by our calculations, the US has bought 37% of them over the past three years.

Access to the US market is also critical for leading firms to maintain profit margins. For example, when Dr Reddy’s secured 180-day exclusivity in the US for selling the antidepressant fluoxetine 40mg in 2001-02, it increased the company’s annual sales of generic drugs by 81% and operating profits by 50%.

The COVID dimension

COVID-19 underlines India’s importance to developing countries when it comes to drug access. The Serum Institute of India (SII), the world’s largest vaccines producer, is collaborating with the World Health Organization, the COVAX facility of Global Alliance for Vaccines and Immunisation (GAVI), and the Coalition for Epidemic Preparedness Innovations (CEPI) to produce and supply 100 million doses of a COVID-19 vaccine at a maximum cost of US$3 per dose.

This is the lowest quoted price in the world for a COVID vaccine, and will see them distributed in low and middle-income countries. By comparison, German biotech firm BioNTech’s deal with US involves a price of US$19.50 per dose, while the Moderna/US deal is set at between US$32 and US$37 per dose.

SII separately has a manufacturing agreement with AstraZeneca to produce one billion doses of the Covishield vaccine, which the UK company is developing with the University of Oxford. The drug is in phase III trials in India at the moment.

SII is also partnering with US firm Novavax to develop and distribute the NVX-CoV2373 vaccine in collaboration with CEPI and COVAX. Again, this involves a minimum of one billion doses for India and other low to middle income countries.

Several other COVID vaccine candidates are being developed by Indian pharma firms: Covaxin, being developed jointly by Bharat Biotech and the Indian Council of Medical Research, has just entered phase III; and ZyCoV-D, by Zudus Cadila, is in phase II. These too are likely to be much cheaper than western equivalents.

Besides vaccines, Indian firms are developing drugs for treating COVID conditions. Baladol, developed by PNB Vesper Life Sciences, has become the first new drug for treating COVID to enter phase II clinical trials around the world. Studies so far have shown that it reduces death rates by 80% – whereas WHO-approved medication dexamethasone reduces them by 20%.

Despite India’s contribution to global access to medicines, the government has never tried to use this as an instrument of foreign policy. All decisions on export destinations and pricing have been made by the firms.

Contrast this with China, which is reportedly using its own vaccine projects as a commercial negotiating tool with countries who stand to benefit. This threatens to put pressure on countries whose leverage was limited already. It is another reason why India’s position as pharmacy of the world has a value far beyond its borders.

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URL of artricle at Naked Capitalism (cut and paste):

Indian Pharma is Being Squeezed – and It’s Bad News for Drug Access in Developing Countries