MINI PROJECT ON

PHARMACEUTICAL INDUSTRY
FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

MASTER OF BUSINESS ADMINISTRATION (MBA)

(Affiliated to Dr.APJ Abdul Kalam Technical University, Lucknow)

Batch-(2020-2022)

UNDER THE GUIDANCE OF: SUBMITTED BY:

PROF. SRISHTI BANERJEE PRINCE BHATI

ASSISTANT PROFESSOR MBA- 2ND SEMESTER

ROLL NO.- 2005330700024

R.V. NORTHLAND INSTITUTE OF

MANAGEMENT CHITEHRA, DADRI,
G.B.NAGAR (U.P.)
1
 CERTIFICATE

This is to certify that the summer training project entitled, “Pharmaceutical Industry"
submitted by "Prince Bhati" bearing Roll No 2005330700024 in partial fulfillment of the
requirements for the award of Master of Business Administration (MBA) at the R.V.
Northland Institute of Management, Chitehra, Dadri, (Affiliated to Dr.APJ Abdul Kalam
Technical University, Lucknow) is an authentic work carried out by him.

It is further certified that the project has been submitted to Dr.APJ Abdul Kalam Technical
University, Lucknow for the partial fulfillment of the requirement of the course of study.

Director
Date:

Place:

2
R.V. NORTHLAND INSTITUTE OF
MANAGEMENT
CHITEHRA, DADRI, G.B.NAGAR (U.P.)

CERTIFICATE BY FACULTY GUIDE

This is to certify that the project entitled, “Pharmaceutical Industry" submitted by "Prince
Bhati" bearing Roll No 200522070024 in partial fulfillment of the requirements for the
award of Master of Business Administration (MBA) at the R.V. Northland Institute of
Management, Chitehra, Dadri, is an authentic work carried out by him under my supervision
and guidance.

Date: PROF. Srishti Banerjee

ASSISTANT PROFESSOR

3
 UNDERTAKING BY STUDENT

I Prince bhati student of MBA 1ST Semester in R.V. Northland Institute of Management,

Chitehra, Dadri, declare that the work presented in this project titled “Pharmaceutical Industry”,

submitted for partial fulfillment of the requirements for the award of Master of Business

Administration (MBA) affiliated to Dr.APJ Abdul Kalam Technical University, Lucknow

(2020-22), is my original work.

I have not plagiarized or submitted the same work for the award of any other degree/diploma.

JULY, 2021

Place

PRINCE BHATI

4
 Acknowledgements

Any accomplishment requires the effort of many people and this work is
not different. I am thankful to my faculty supervisor Prof. Srishti Banerjee
for supporting me and guiding me throughout the project. This report
would not have been possible without her help. I would also like to
express my gratitude towards (HOD) Prof. (Dr.) S. N. Sharma, for his
cooperation and giving his valuable time and information for my thesis
preparation.

PRINCE BHATI
2005330700024
MBA Department RVNI

5
Contents Page No.

1. Pharmaceutical Industry In India 7-9

2. Overview of Pharmaceutical Industry 10 - 11

3. Industry Sector Development 12 - 16

4. Research and Product Development 17 - 19

5. Types of companies 20 - 23

6. Export in Indian pharmaceutical industry 24 - 25

7. Criticum of pharma company 26 - 28

8. History of pharmaceutical industry 29 - 35

9. Global sales and Marketing 36 - 40

10. Conclusion 41 - 42
6
7
The Pharmaceutical Industry in India, US$40 billion by value, world’s 3rd
largest by overall volume and world’s largest as provider of genric medicines
globally, with 20% and 3.5% share of total global pharmaceutical exports by
volume and value respectively to more than 200 countries and territories in
2021. With industry standards compliant mega production capabilities and
large number of skilled domestic workforce, Indian exports meet the standards
and requirements of highly regulated markets of USA, UK, European Union and
Canada.

According to the department of pharmaceuticals, ministry of chemicals and

fertilizers, domestic pharmaceutical market turnover reached Rs 129,015 crore
(US$18.12 billion) in 2018, growing 9.4 per cent year – on – year and exports
revenue was US$17.28 billion in FY18 and US$19.14 billion in FY19.

As of 2021, most of pharmaceuticals made in India are low cost genric drug
which comprise most of pharmaceutical export of india. Patented medicine are
imported.

APIs are imported from China (66% supplies by volume worth US$2.4 billion
And Germany (US$1.6 billion)as well as from US , Italy and Singapore. To faster
as Atamnirbhar Bharat by enhancing the R&D, make in India product
development and high value production capabilities, import substitution and
domestic manufacture of active pharmaceutical ingredients (API) the
government has introduced a US$2 billion incentive program which will run
from 2021-22 to 2027-28.

In 2019 the department of pharmaceuticals announced that as part of the

make in indiainitiative, drugs for the local use and exports must have 75% and
10% local APIs respectively and a bill of materials must be produced for
verification.

8
  Major pharmaceutical hubs in India :-

1. Vadodara

2. Ahmedabad

3. Ankeleshwar (Gujarat)

4. Vapi ( Gujarat)

5. Baddi ( Himachal Pardesh)

6. Sikkim

7. Kolkata

8. Visakhapatnam

9. Hyderabad

10. Bangalore

11. Chennai

12. Mumbai

13. Pune
9
10
Summary :-

As of 2002, over 20,000 registered drug-manufacturers in India sold $9 billion

worth of formulations and bulk drugs. 85% of these formulations were sold in
India while over 60% of the bulk drugs were exported, mostly to the United
States and to Russia.

Most of the players in the market are small-to-medium enterprises; 250 of the
largest companies control 70% of the Indian market. Thanks to the 1970
Patent Act, multinationals represent only 35% of the market, down from 70%
thirty years ago.

Most pharma companies operating in India, even the multinationals, employ

Indians almost exclusively from the lowest ranks to high-level management.

Homegrown pharmaceuticals, like many other businesses in India, are often a

mix of public and private enterprise.

In terms of the global market, India currently holds an accountable share and is
known as the pharmacy of the world and as the biggest generic supplier.

India gained its foothold on the global scene with its innovatively-engineered
generic drugs and active pharmaceutical ingredients (API), The country
accounts for around 30 per cent (by volume) and about 10 per cent (value) in
the US$70–80 billion US generics market.

Growth in other fields notwithstanding, generics are still a large part of the
picture. India is the largest provider of generic drugs globally. The Indian
pharmaceutical-sector industry supplies over 50 per cent of global demand for
various vaccines, 40 per cent of generic demand in the US and 25 per cent of
all medicine in the UK.

India is the largest contributor in UNESC with over 50-60% share.

11
12
 GOVERNMENT INTERVENTION :-

The Indian government established the Department of Biotechnology in 1986

under the Ministry of Science and Technology. Since then, there have been a
number of dispensations offered by both the central government and various
states to encourage the growth of the industry. India's science minister
launched a program that provides tax incentives and grants for biotech start-
ups and firms seeking to expand and establishes the Biotechnology Parks
Society of India to support ten biotech parks by 2010. Previously limited to
rodents, animal testing was expanded to include large animals as part of the
minister's initiative.

States have started to vie with one another for biotech business, and they are
offering such goodies as exemption from VAT and other fees, financial
assistance with patents and subsidies on everything ranging from investment
to land to utilities.

The Government started to encourage the growth of drug manufacturing by

Indian companies in the early 1960s, and with the Patents Act in 1970. The
government has addressed the problem of educated but unqualified
candidates in its Draft National Biotech Development Strategy. This plan
included a proposal to create a National Task Force that will work with the
biotech industry to revise the curriculum for undergraduate and graduate
study in life sciences and biotechnology.

The government's strategy also stated intentions to increase the number of

PhD Fellowships awarded by the Department of Biotechnology to 200 per year.
These human resources will be further leveraged with a "Bio-Edu-Grid" that
will knit together the resources of the academic and scientific industrial
communities, much as they are in the US.

The biotechnology sector faces some major challenges in its quest for growth.
Chief among them is a lack of funding, particularly for firms that are just
starting out. The most likely sources of funds are government grants and
venture capital, which is a relatively young industry in India. Government
grants are difficult to secure, and due to the expensive and uncertain nature of
biotech research, venture capitalists are reluctant to invest in firms that have
not yet developed a commercially viable product.
13
Incentives for R&D, product development and high-
value production :-

Government of India has launched a Production Linked Incentive (PLI) Scheme

for Pharmaceuticals with provision for disbursal of US$2 billion or iNR 15,000
crore government incentives, which will run from 2020-21 to 2028-29, to
reduce import dependence, benefit domestic manufacturers, boost product
diversification and innovation for development of complex and high-tech
products especially in in vitro diagnostic devices and emerging technologies
especially in cell based or gene therapy, employment generation and
production of wide range of lower cost affordable medicines for consumers
with the aim to achieve incremental sales of US$4 billion or INR 294,000 crore
and incremental exports of US$2.7 billion or INR 196,000 crore between 2022-
23 to 2027-28.

Manufacture of API supplies in India :-

To eliminate the dependence on China after the 2017 China–India border

standoff to foster an Atmanirbhar Bharat, in July 2021 India's Council of
Scientific and Industrial Research (CSIR) initiated a Make in India program in
collaboration with the coaland petroleum industries of India to end-to-end
manufacture 56 prioritised active pharmaceutical ingredient (API) for the
essential medicines. In 2016-17, China was the largest supplier of API to India
with 66% share by volume of API raw material supplies to India worth US$2.4
billion or INR 18,000 crore, followed by US$1.6 billion API imported from
Germany, the US, Italy and Singapore are other major suppliers to India.

14
Foreign investment :-

Per India's Consolidated FDI Policy, 2020 (the “FDI Policy”), foreign direct
investment (“FDI”) in the pharmaceutical sector in greenfield (new) projects is
permitted up to 100% without the approval of the Department of
Pharmaceuticals (the “DoP”).

In brownfield (existing) projects, FDI exceeding 74% requires the investor to

seek prior approval from the DoP in compliance with the prescribed conditions
under the FDI Policy.

Separately, FDI up to 100% is permitted for the manufacturing of medical

devices for both greenfield and brownfield projects without the approval of
the DoP.

An FDI approval from the DoP can be obtained within a period of ten (10) to
twelve (12) weeks from the date of the application, depending on the
completeness of the documentation submitted by the investor in support of
the application, failing which, this timeline could vary.

Relation between pharma and biotech :-

India's biopharmaceutical industry clocked a 17 percent growth with revenues

of Rs. 137 billion ($1.8 billion) in the 2009-10 financial year over the previous
fiscal. Bio-pharma was the biggest contributor generating 60 percent of the
industry's growth at Rs. 8,829 crore, followed by bio-services at Rs. 2,639 crore
and bio-agri at Rs. 1,936 crore. Indian companies carved a niche in both the
Indian and world markets with their expertise in reverse-engineering new
processes for manufacturing drugs at low costs which became the advantage
for industry.

15
Unlike in other countries, the difference between biotechnology and
pharmaceuticals remains fairly defined in India, with biotech a much smaller
part of the economy. India accounted for 2% of the $41 billion global biotech
market and in 2003 was ranked 3rd in the Asia-Pacific region and 13th in the
world in number of biotech. In 2004–5, the Indian biotech industry saw its
revenues grow 37% to $1.1 billion.

The Indian biotech market is dominated by biopharmaceuticals; 76% of 2004–5

revenues came from biopharmaceuticals, which saw 30% growth last year. Of
the revenues from biopharmaceuticals, vaccines led the way, comprising 47%
of sales. Biologics and large-molecule drugs tend to be more expensive than
small-molecule drugs, and India hopes to sweep the market in bio-generics and
contract manufacturing as drugs go off patent and Indian companies upgrade
their manufacturing capabilities.

Most companies in the biotech sector are extremely small, with only two firms
breaking 100 million dollars in revenues. At last count there were 265 firms
registered in India, over 92% of which were incorporated in the last five years.

The newness of the companies explains the industry's high consolidation in

both physical and financial terms. Almost 30% of all biotech are in or around
Bangalore, and the top ten companies capture 47% of the market. The top five
companies were homegrown; Indian firms account for 72% of the bio-pharma
sector and 52% of the industry as a whole.[4,46] The Association of
Biotechnology-Led Enterprises (ABLE) is aiming to grow the industry to $5
billion in revenues generated by 1 million employees by 2009, and data from
the Confederation of Indian Industry (CII) seem to suggest that it is possible.

Comparison with the United States :-

The Indian biotech sector parallels that of the US in many ways. Both are filled
with small start ups while the majority of the market is controlled by a few
powerful companies. Both are dependent upon government grants and
venture capitalists for funding because neither will be commercially viable for
years.
16
17
Product development :-

Indian companies are also starting to adapt their product development

processes to the new environment. For years, firms have made their ways into
the global market by researching generic competitors to patented drugs and
following up with litigation to challenge the patent.

This approach remains untouched by the new patent regime and looks to
increase in the future. However, those that can afford it have set their sights
on an even higher goal: new molecule discovery.

Although the initial investment is huge, companies are lured by the promise of
hefty profit margins and thus a legitimate competitor in the global industry.
Local firms have slowly been investing more money into their R&D programs or
have formed alliances to tap into these opportunities.

Patents :-

In 1970, Indira Gandhi enacted legislation which barred medical products from
being patented in the country. In 1994, 162 countries including India signed
the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement,
which stipulated that patents had to be given to all inventions including
medicines.

India and other developing countries were provided an extra ten years to
comply fully with the conditions mandated by TRIPS.

India succeeded in including a crucial clause to the agreement in the form of

the right to grant compulsory licenses (CLs) to others to manufacture drugs in
cases where the government felt that the patent holder was not serving the
public health interest.
18
This right was used in 2012, when Natcowas granted a CL to produce Nexavar,
a cancer drug. In 2005, a provision was added to the new legislation as section
3(d) which stipulated that a medicine could not be patented if it did not result
in "the enhancement of the known efficacy of that substance".

A significant change in intellectual property protection in India was 1 January

2005 enactment of an amendment to India's patent law that reinstated
product patents for the first time since 1972.

The legislation took effect on the deadline set by the WTO's Trade-Related
Aspects of Intellectual Property Rights (TRIPS) agreement, which mandated
patent protection on both products and processes for a period of 20 years.

Under this new law, India will be forced to recognise not only new patents but
also any patents filed after 1 January 1995.

In December 2005, the TRIPS pact was amended to incorporate specific

safeguards to ensure that the public health concerns of affordability and
accessibility for a large section of people in developing countries was not
compromised.

These amendments came into force only in January 2017, however, after two-
thirds of the member countries ratified them.

In the domestic market, this new patent legislation has resulted in fairly clear
segmentation.

The multinationals narrowed their focus onto high-end patents who make up
only 12% of the market, taking advantage of their newly bestowed patent
protection.

Meanwhile, Indian firms have chosen to take their existing product portfolios
and target semi-urban and rural populations.

19
20
Small and medium enterprises :-

As promising as the future is for a whole, the outlook for small and medium
enterprises (SME) is not as bright. The excise structure changed so that
companies now have to pay a 16% tax on the maximum retail price (MRP) of
their products, as opposed to on the ex-factory price.

Consequently, larger companies cut back on outsourcing and what business is

left shifted to companies with facilities in the four tax-free states – Himachal
Pradesh, Jammu and Kashmir, Uttarakhand, and Jharkhand. Consequently, a
large number of pharmaceutical manufacturers shifted their plant to these
states, as it became almost impossible to continue operating in non-tax free
zones.

But in a matter of a couple of years the excise duty was revised on two
occasions, first it was reduced to 8% and then to 4%. As a result, the benefits
of shifting to a tax free zone was negated.

This resulted in, factories in the tax free zones, to start up third-party
manufacturing.

Under this these factories produced goods under the brand names of other
parties on job work basis.

As SMEs wrestled with the tax structure, they were also scrambling to meet
the 1 July deadline for compliance with the revised Schedule M Good
Manufacturing Practices (GMP).

While this should be beneficial to consumers and the industry at large, SMEs
have been finding it difficult to find the funds to upgrade their manufacturing
plants, resulting in the closure of many facilities.

Others invested the money to bring their facilities to compliance, but these
operations were located in non-tax-free states, making it difficult to compete
in the wake of the new excise tax.

21
Largest companies :-

By market capitalisation in Indian stock exchange

Top 10 listed pharmaceutical companies in India by market capitalization as of

May 2021.

Rank Company Market Capitalization May 2021

(INR crores)

1 Sun Pharma 168,409

2 Divi's Laboratories 108,810

3 Dr. Reddy's Laboratories 87,407

4 Cipla 75,673

5 Cadila Healthcare 64,419

6 Aurobindo Pharma 60,119

7 Lupin 54,379

8 Gland Pharma 53,164

9 Torrent Pharmaceuticals 45,789

10 Alkem Laboratories 34,745

22
By sales and marketing operations within India :-

Multinational Pharmaceutical Companies ranked as per active presence of

sales, marketing and business in India are as follows :-

1. Pfizer

2. GlaxoSmithKline

3. Sanofi Aventis

4. Merck

5. Johnson and Johnson

6. Amgen

7. Novartis

8. Roche

9. Bristol-Myers Squibb

10. Wyeth

11. Eli Lilly and Company

12. Schering-Plough

13. Abbott

14. Takeda pharmaceutical company

23
24
Exports of pharmaceuticals products from India increased from US$6.23 billion
in 2006–07 to US$8.7 billion in 2008-09 a combined annual growth rate of
21.25%.

India exported $11.7 billion worth of pharmaceuticals in 2014. Pharmaceutical

export from India stood at US$17.27 billion in 2017–18, and is expected to
grow by 30 per cent to reach US$20 billion by the year 2020.And India Share in
This 40%

The 10 countries below imported 56.5% of that total :-

Rank Country Value (US$ millions) Share

1 United States $3800 32.9%
2 South Africa $461.1 3.9%
3 Russia $447.9 3.8%
United
4 $444.9 3.8%
Kingdom
5 Nigeria $385.4 3.3%
6 Kenya $233.9 2%
7 Tanzania $225.2 1.9%
8 Brazil $212.7 1.8%
9 Australia $182.1 1.6%
10 Germany $178.8 1.5%

25
26
Patents :-

It has been pointed out that the pharma industry is not scrutinised enough
when it comes to withdrawing patent challenges.

For example, in the case of the patent application filed by Gilead Sciences for
the Hepatitis C medicine sofosbuvir in 2014, Natco initially filed challenges to
this application in Delhi.

However, a month after signing a voluntary licensing agreement with Gilead,

Natco withdrew the patent challenge.

It has been argued that Mylan (an influential pharmaceutical company which
was Natco's client) exerted pressure on the latter and 'brokered' a deal, though
the term 'brokered' has been refuted by Mylan.

Many activists argue that such agreements in effect deny patients in some
countries the right to affordable drugs.

It has also been pointed out that without the patent, voluntary licensing would
imply charging rent on property not even owned by the company.

The Competition Commission of India ought to carefully look at every

withdrawal of patent challenges, as well as such private agreements, since
these impact both public health and the competitive environment of the
market.

27
Quality :-

Between 2015 and 2017, there were 31 FDA warning letters to Indian
pharmaceutical companies citing serious Data Integrity issues, including data
deletion, manipulation or fabrication of test results, see "An Analysis of 2017
FDA Warning Letters on Data Integrity" By Barbara Unger, Unger Consulting
Inc.

According to Outsourcing Pharma in 2012 75% of counterfeit drugs supplied

world over had some origins in India, followed by 7% from Egypt and 6% from
China.

The Central Drug Standards Control Organisation (CDSCO), the drug regulatory
authority of India conducted a nationwide survey in 2009 and announced that
of "24,000 samples [that] were collected from all over India and tested.

It was found that only 11 samples or 0.046% were spurious."[31] In 2017 a

similar survey found 3.16% of the medicines sampled were substandard and
0.0245% were fake.

Those more commonly prescribed are probably more often faked.

28
29
He pharmaceutical industry discovers, develops, produces, and markets drugs
or pharmaceutical drugs for use as medications to be administered (or self-
administered) to patients, with the aim to curethem, vaccinate them, or
alleviate the symptoms. Pharmaceutical companies may deal in generic or
brand medications and medical devices. They are subject to a variety of laws
and regulations that govern the patenting, testing, safety, efficacy and
marketing of drugs.

Mid-1800s – 1945: From botanicals to the first

synthetic drugs

The modern pharmaceutical industry began with local apothecaries that

expanded from their traditional role distributing botanical drugs such as
morphine and quinine to wholesale manufacture in the mid-1800s, and from
discoveries resulting from applied research.

Intentional drug discovery from plants began with the isolation between 1803
and 1805 of morphine - an analgesic and sleep-inducing agent - from opium by
the German apothecary assistant Friedrich Sertürner, who named this
compound after the Greek god of dreams, Morpheus.

By the late 1880s, German dye manufacturers had perfected the purification of
individual organic compounds from tar and other mineral sources and had also
established rudimentary methods in organic chemical synthesis.

The development of synthetic chemical methods allowed scientists to

systematically vary the structure of chemical substances, and growth in the
emerging science of pharmacology expanded their ability to evaluate the
biological effects of these structural changes.

Epinephrine, norepinephrine, and amphetamine

By the 1890s, the profound effect of adrenalextracts on many different tissue
types had been discovered, setting off a search both for the mechanism of

30
chemical signalling and efforts to exploit these observations for the
development of new drugs.

While highly effective, the requirement for injection limited the use of
epinephrine[clarification needed] and orally active derivatives were sought. A
structurally similar compound, ephedrine, (actually more The blood pressure
raising and vasoconstrictive effects of adrenal extracts were of particular
interest to surgeons as hemostatic agents and as treatment for shock, and a
number of companies developed products based on adrenal extracts
containing varying purities of the active substance.

In 1897, John Abel of Johns Hopkins University identified the active principle as
epinephrine, which he isolated in an impure state as the sulfate salt. Industrial
chemist Jōkichi Takaminelater developed a method for obtaining epinephrine
in a pure state, and licensed the technology to Parke-Davis. Parke-Davis
marketed epinephrine under the trade name Adrenalin. Injected epinephrine
proved to be especially efficacious for the acute treatment of asthma attacks,
and an inhaled version was sold in the United States until 2011 (Primatene
Mist).

By 1929 epinephrine had been formulated into an inhaler for use in the
treatment of nasal congestionsimilar to norepinephrine,) was identified by
Japanese chemists in the Ma Huang plant and marketed by Eli Lilly as an oral
treatment for asthma. Following the work of Henry Dale and George Barger at
Burroughs-Wellcome, academic chemist Gordon Alles synthesized
amphetamine and tested it in asthma patients in 1929. The drug proved to
have only modest anti-asthma effects but produced sensations of exhilaration
and palpitations. Amphetamine was developed by Smith, Kline and French as a
nasal decongestant under the trade name Benzedrine Inhaler.

Amphetamine was eventually developed for the treatment of narcolepsy, post-

encephalitic parkinsonism, and mood elevation in depression and other
psychiatric indications. It received approval as a New and Nonofficial Remedy
from the American Medical Association for these uses in 1937[7] and remained
in common use for depression until the development of tricyclic
antidepressants in the 1960s.

31
Discovery and development of the barbiturates
Diethylbarbituric acid was the first marketed barbiturate. It was sold by Bayer
under the trade name Veronal
In 1903, Hermann Emil Fischer and Joseph von Mering disclosed their discovery
that diethylbarbituric acid, formed from the reaction of diethylmalonic acid,
phosphorus oxychloride and urea, induces sleep in dogs. The discovery was
patented and licensed to Bayer pharmaceuticals, which marketed the
compound under the trade name Veronal as a sleep aid beginning in 1904.

Systematic investigations of the effect of structural changes on potency and

duration of action led to the discovery of phenobarbital at Bayer in 1911 and
the discovery of its potent anti-epileptic activity in 1912. Phenobarbital was
among the most widely used drugs for the treatment of epilepsy through the
1970s, and as of 2014, remains on the World Health Organizations list of
essential medications.

The 1950s and 1960s saw increased awareness of the addictive properties and
abuse potential of barbiturates and amphetamines and led to increasing
restrictions on their use and growing government oversight of prescribers.
Today, amphetamine is largely restricted to use in the treatment of attention
deficit disorder and phenobarbital in the treatment of epilepsy.

Insulin

A series of experiments performed from the late 1800s to the early 1900s
revealed that diabetes is caused by the absence of a substance normally
produced by the pancreas.

In 1869, Oskar Minkowski and Joseph von Mering found that diabetes could be
induced in dogs by surgical removal of the pancreas.

32
In 1921, Canadian professor Frederick Banting and his student Charles Best
repeated this study and found that injections of pancreatic extract reversed
the symptoms produced by pancreas removal.

Soon, the extract was demonstrated to work in people, but development of

insulin therapy as a routine medical procedure was delayed by difficulties in
producing the material in sufficient quantity and with reproducible purity. The
researchers sought assistance from industrial collaborators at Eli Lilly and Co.
based on the company's experience with large scale purification of biological
materials.

Chemist George B. Walden of Eli Lilly and Company found that careful
adjustment of the pH of the extract allowed a relatively pure grade of insulin to
be produced. Under pressure from Toronto University and a potential patent
challenge by academic scientists who had independently developed a similar
purification method, an agreement was reached for non-exclusive production
of insulin by multiple companies.

Prior to the discovery and widespread availability of insulin therapy the life
expectancy of diabetics was only a few months.

Early anti-infective research: Salvarsan, Prontosil,

Penicillin and vaccines

The development of drugs for the treatment of infectious diseases was a major
focus of early research and development efforts; in 1900 pneumonia,
tuberculosis, and diarrhea were the three leading causes of death in the United
States and mortality in the first year of life exceeded 10%.

In 1911 arsphenamine, the first synthetic anti-infective drug, was developed by

Paul Ehrlich and chemist Alfred Bertheim of the Institute of Experimental
Therapy in Berlin. The drug was given the commercial name Salvarsan.

Ehrlich, noting both the general toxicity of arsenic and the selective absorption
of certain dyes by bacteria, hypothesized that an arsenic-containing dye with
33
similar selective absorption properties could be used to treat bacterial
infections. Arsphenamine was prepared as part of a campaign to synthesize a
series of such compounds and found to exhibit partially selective toxicity.

Arsphenamine proved to be the first effective treatment for syphilis, a disease

which prior to that time was incurable and led inexorably to severe skin
ulceration, neurological damage, and death.

Ehrlich's approach of systematically varying the chemical structure of synthetic

compounds and measuring the effects of these changes on biological activity
was pursued broadly by industrial scientists, including Bayer scientists Josef
Klarer, Fritz Mietzsch, and Gerhard Domagk.

This work, also based in the testing of compounds available from the German
dye industry, led to the development of Prontosil, the first representative of
the sulfonamideclass of antibiotics. Compared to arsphenamine, the
sulfonamides had a broader spectrum of activity and were far less toxic,
rendering them useful for infections caused by pathogens such as streptococci.

In 1939, Domagk received the Nobel Prize in Medicine for this discovery.
Nonetheless, the dramatic decrease in deaths from infectious diseases that
occurred prior to World War II was primarily the result of improved public
health measures such as clean water and less crowded housing, and the impact
of anti-infective drugs and vaccines was significant mainly after World War II.

In 1928, Alexander Fleming discovered the antibacterial effects of penicillin,

but its exploitation for the treatment of human disease awaited the
development of methods for its large scale production and purification. These
were developed by a U.S. and British government-led consortium of
pharmaceutical companies during the Second World War.

Early progress toward the development of vaccines occurred throughout this

period, primarily in the form of academic and government-funded basic
research directed toward the identification of the pathogens responsible for
common communicable diseases.

34
In 1885 Louis Pasteur and Pierre Paul Émile Roux created the first rabies
vaccine. The first diphtheria vaccines were produced in 1914 from a mixture of
diphtheria toxin and antitoxin (produced from the serum of an inoculated
animal), but the safety of the inoculation was marginal and it was not widely
used. The United States recorded 206,000 cases of diphtheria in 1921 resulting
in 15,520 deaths.

In 1923 parallel efforts by Gaston Ramon at the Pasteur Institute and

Alexander Glenny at the Wellcome Research Laboratories (later part of
GlaxoSmithKline) led to the discovery that a safer vaccine could be produced
by treating diphtheria toxin with formaldehyde.

In 1944, Maurice Hilleman of Squibb Pharmaceuticals developed the first

vaccine against Japanese Encephalitis. Hilleman would later move to Merck
where he would play a key role in the development of vaccines against
measles, mumps, chickenpox, rubella, hepatitis A, hepatitis B, and meningitis

Unsafe drugs and early industry regulation

In 1937 over 100 people died after ingesting a solution of the antibacterial
sulfanilamide formulated in the toxic solvent diethylene glycol

Prior to the 20th century, drugs were generally produced by small scale
manufacturers with little regulatory control over manufacturing or claims of
safety and efficacy.

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Global sales :-

Top 26 drug companies by sales (2021)

Company Pharma sales($ million)

Pfizer United States 45,083

GlaxoSmithKline United Kingdom 40,156
Sanofi-Aventis France 38,555
Roche Switzerland 27,290
AstraZeneca United Kingdom/Sweden 26,475
Johnson & Johnson United States 23,267
Novartis Switzerland 22,576
Merck & Co United States 20,375
Unilever United Kingdom/Netherlands 24,395
Wyeth United States 16,884
Lilly United States 15,691
Bristol-Myers Squibb United States 13,861
Boehringer Ingelheim Germany 13,860
Amgen United States 13,858
Abbott Laboratories United States 12,395
Bayer Germany 10,162
Takeda Japan 8,716
Schering-Plough United States 8,561
Teva Israel 7,821
Genentech United States 7,640
Astellas Japan 7,390
Novo Nordisk Denmark 7,087
Daiichi Sankyo Japan 6,790
Baxter International United States 6,461
Merck KGaA Germany 5,643
Eisai Japan 4,703

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In 2011, global spending on prescription drugs topped $954 billion, even as
growth slowed somewhat in Europe and North America. The United States
accounts for more than a third of the global pharmaceutical market, with $340
billion in annual sales followed by the EU and Japan.

Emerging markets such as China, Russia, South Korea and Mexico outpaced
that market, growing a huge 81 percent.

The top ten best-selling drugs of 2013 totaled $75.6 billion in sales, with the
anti-inflammatory drug Humira being th e best-selling drug worldwide at $10.7
billion in sales. The second and third best selling were Enbrel and Remicade,
respectively.

The top three best-selling drugs in the United States in 2013 were Abilify ($6.3
billion,) Nexium ($6 billion) and Humira ($5.4 billion). The best-selling drug
ever, Lipitor, averaged $13 billion annually and netted $141 billion total over
its lifetime before Pfizer's patent expired in November 2011.

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.

Patents and generics

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, granting
exclusivity rights typically for about 20 years.

However, only after rigorous study and testing, which takes 10 to 15 years on
average, will governmental authorities grant permission for the company to
market and sell the drug.

Patent protection enables the owner of the patent to recover the costs of
research and development through high profit margins for the branded drug.

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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.

Restructuring has therefore become routine, driven by the patent expiration

of products launched during the industry's "golden era" in the 1990s and
companies' failure to develop sufficient new blockbuster products to replace
lost revenues.

Prescriptions
In the U.S., the value of prescriptions increased over the period of 1995 to
2005 by 3.4 billion annually, a 61 percent increase. Retail sales of prescription
drugs jumped 250 percent from $72 billion to $250 billion, while the average
price of prescriptions more than doubled from $30 to $68.

Marketing :-

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 directly to the general public.

Pharmaceutical companies generally employ salespeople (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.

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Marketing of prescription drugs in the US is regulated by the federal
Prescription Drug Marketing Act of 1987.

To healthcare professionals

The book Bad Pharma also discusses the influence of drug representatives,
how ghostwriters are employed by the drug companies to write papers for
academics to publish, how independent the academic journals really are, how
the drug companies finance doctors' continuing education, and how patients'
groups are often funded by industry.

Direct to consumer advertising

Main article: 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.

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41
Conclusion :-

The Indian Pharmaceutical Industry has shown great potential and continues to
grow consistently. Though, since health is an important subject, the industry
continues to be regulated.

Multiple Ministries continue to regulate the pharmaceutical industry such as

the Health Ministry, Chemicals and Fertilizers Ministry, Science and Technology
Ministry, Food Ministry etc.

However, the Indian generic drug sector is robust and is establishing its
presence in foreign markets.

Given that the regulatory framework has been streamlined further in the last
couple of years, Indian generic companies have been seeing an increasing
number of foreign investments.

The new drug sector is also expected to record a healthy growth owing to
significant industry wise increase in R&D expenditure and proposed new drug
launches.

Thus, the Indian pharmaceutical sector continues to be an attractive

destination for multinational pharmaceutical companies and investors.

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