My colleague Vikas Dandekar of Pharmasianews reports on a potentially pathbreaking event. Swiss drug maker Roche has struck a manufacturing deal with Pune’s Emcure to produce some portion of its blockbuster biologic Herceptin for breast cancer and Pegasys for hepatitis B and C in India for India.
Of course, it doesn’t look as if Emcure is going to start manufacturing the products from the cell culture stage – the story quotes a senior Roche executive referring to “late-stage” manufacturing. Don’t know exactly what that entails. This executive talks of “substantial” price adjustments that could take place as a result. Assuming its a deep engagement, the news is pretty exciting. Here’s why.
For one, given that Indian companies were having such a tough time attracting Big Pharma to outsource manufacturing of their under-patent small molecule drugs to India, Emcure’s alliance with Roche for its prized biologics is rather unusual and could earn Indian manufacturing quite some number of brownie points at a headline level.
But the bigger takeout is that the Indian market has forced Roche to think differently. Pharmasia quotes the Roche executive – Pascal Soriot, COO of Roche’s pharmaceutical division – talking to investors in a call as follows : “The problem in India is the pricing, and of course the population cannot access medicines very easily. Our business has been very successful, but too small and the problem is, we can’t scale it up.” He adds, “Our prices are probably too high (itals mine) for the Indian market.”
Pharmasia estimates that a single Herceptin injection costs over a lakh of rupees but if patient support groups pool in the cost to the patient might be around Rs 50,000 per injection. She gets several.
Just for perspective what else can Rs one lakh buy here? An admission for two years to a good private kindergarten school in Mumbai. Help put down a deposit on rented accomodation in a distant suburb of the city. Help feed 1480 poor children for a full year under a mid-day meal programme run by the ISKON.
What’s interesting is that Roche clearly sees that to take full advantage of the large market that India is, it needs to price appropriately. Soriot says further, “The plan is really to expand the volume very substantially. And there is a lot of room for that.”
Please note – no government diktat, no recent activism, just plain and simple economics. Indeed, the government is actually making money from some of Roche’s imports via duties right now and this is one thing that Roche seems keen to pare down by producing locally.
It’s also relevant to mention here that Indian courts refused to injunct generic firm Cipla from selling a copy of Roche’s cancer drug Tarceva citing “public interest” because its price was too high. So even though India has amended its patent laws, the threat of generic competition has not been completely warded off.
We still don’t know how deep the price cuts will be. Since companies define their customers more narrowly than governments their constituencies, the state has to step in to make these medicines affordable using various means for those who cannot pay even the lowered prices. Right now apart from AIIMS and Tata Memorial one is not aware of any other government centre which provide large-scale subsidies on modern cancer medicines to Indian patients.
Would love to hear your views on this recent development. Thanks Vikas for sending me your story.
Since this post seems to be attracting lot of interest, just thought of doing a quick update. Fierce Pharma on March 5 quoted Roche spokeswoman Claudia Schmitt as confirming that Roche is partnering with Emcure in India for manufacturing cancer drugs Herceptin and MabThera (she did not mention Pegasys though Soriot had) for the Indian market. “We may expand this arrangement for other Roche products in the future,” she said. On March 2, the Economic Times had quoted an Emcure director Mukund Ranade as saying that manufacturing Herceptin and Mabthera would be their first project with Roche and this could be extended to other products, if successful. “This deal will equip Emcure to manufacture products which are sophisticated Monoclonal Antibodies,” he said. “Emcure will manufacture these drugs for the Indian market and depending on the success of this drug it will be taken to other developing countries,” the article said. It is relevant to mention here that while Herceptin has no biosimilar competition in India, Mabthera competes with Dr Reddy’s Reditux which launched at a 50 per cent discount to Mabthera in 2007.