LIFE SCIENCES AND HEALTHCARE

INTRODUCTION

India’s healthcare industry is worth around According to a recent study by PA Consulting for UK Trade & Investment, £25−30 billion and is expected to grow to the Indian healthcare sector has been growing at a CAGR of 14%. over £40 billion in the next two–three years. There is a huge demand−supply mismatch. 73.77 It is estimated that over 80,000 multi- speciality and super-speciality hospital beds are required. The UK businesses specialising 63.33 in the pharmaceutical, advanced healthcare delivery, diagnostics and medical equipment 53.6 and insurance segments have been successful in India. Other than expanding 44.21 opportunities in these segments, there 40.76 are opportunities in e-healthcare, clinical 38.14 research, R&D, education and training. 34.84 30.25 According to a study by an industry body and Ernst & Young, India will require another LIfe ScIenceS and 1.75 million beds by the end of 2025. The HeaLtHcaRe cOntact: public sector, however, is likely to contribute only around 15−20% of the required $86 Prasenjit Dhar, billion (approx. £53.75 billion) investment. [email protected] Corporate India is therefore leveraging this Tel: + 44(0)20 7592 3040 business potential and various healthcare 2005 2006 2007 2008 2009 2010 2011 2012 www.ukibc.com brands have started aggressive expansion in the country. Ranbaxy, Dabur, Apollo (est) (est) (est) (est) Hospitals, Fortis, Cipla and Wockhardt Source: PA Consulting study. are already household names and others planning to increase their footprint, According to a recent study including Anil Ambani’s Reliance Health, by PA Consulting for UK Trade the Hindujas, the Sahara Group, Emami, & Investment, the Indian Apollo Tyres and the Panacea Group. India’s healthcare industry is worth around £25−30 billion and is healthcare sector has been expected to grow to over £40 billion in the next two–three years. growing at a CAGR of 14%.

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The rural healthcare sector is also expanding. The UK has a long history of working to help UKIBc annUaL SUMMIt 2011 The session participants were: The Rural Health Survey Report 2009, meet patient needs in India. Recent years At our annual summit, which took place • Sir Mark Walport, Director, released by the Ministry of Health, stated have seen an increase in the number of UK on 10th March in Manchester, we had a The Wellcome Trust that during the last ive years the rural health providers who can support healthcare projects session focusing speciically on opportunities sector has added around 15,000 health sub- in India, either by having operations in India and challenges facing the healthcare and • Dr Brian Tempest, Chairman, Religare centres and 28,000 nurses and midwives. or by having established partnerships with life sciences sector. The session considered Capital Markets (ex-Director, Ranbaxy) The report further stated that the number Indian irms to deliver cost-effective solutions. areas such as affordable healthcare • Jamila Joseph, Head of Clinical Research of primary health centres have increased Some of the key UK players already present technologies, biotech, and technology Services, Reliance Life Sciences by 84%, taking the number to 20,107. in the Indian market are GlaxoSmithKline collaboration and transfers suitable for the and AstraZeneca, as well niche companies • Dr Pawan Saharan, Founder According to an IBEF report, the key growth Indian market. Other than giving an overview such as Smith & Nephew, Huntleigh, the and CEO, Biomix driver for the Indian healthcare market is of opportunities that the Indian market Smiths Group, Randox Laboratories, Omega the increased spending on healthcare by presents, the experts on the panel talked of Diagnostics and Touch Bionics. We are also • Chris Francis, Founder, Cardionetics the growing middle class. It is expected their experience of and plans for working increasingly seeing investment in the UK that healthcare expenditure will grow at in Indian and UK markets and answered • Sujay Shetty, Partner, Head of and other global markets from major Indian around 15% annually. The sector is likely questions about doing business in India. Pharmaceutical Group, PwC India life science companies such as Reliance to contribute over 6% of India’s GDP and Life Sciences and TCG Life Sciences. employ around nine million people by 2012.

The Rural Health Survey Report 2009, released by the Ministry of Health, stated that during the last ive years the rural health sector has added around 15,000 health sub-centres and 28,000 nurses and midwives.

Source: Ernst and Young Research

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Based on these arguments, the health up supplies as they battle falling prices (FTA) negotiations, India may have to MARKET UPDATE ministry advocates doing away with the and increasing generic competition. abide by a series of international standards current automatic 100% FDI approval route and regulatory practices in the healthcare for the pharmaceutical industry, suggesting Cipla, with a market value of $5.5 sector. For instance, EU negotiators have IndIan PHaRMaceUtIcaL SectOR that foreign investment in that sector should billion, is one of the world’s biggest sought India’s commitment to adopting GROWS at 16.5% In 2010 be allowed through the more controlled producers of low-cost antiretroviral Global Harmonisation Task Force (GHTF) and case-by-case FIPB (Foreign Investment norms for medical devices. The move The Indian pharmaceutical sector continued drugs to ight HIV and AIDS. its strong showing in 2010, growing at Promotion Board) route. However, at an comes at a time when India and other 16.5%. The £6.4 billion pharma market inter-ministerial meeting, the Finance Ministry Asian countries are trying to formulate has been on an upswing over the last four opposed changes to the current FDI policy for their own harmonised regulatory guidelines years, with annual growth of 13−17%, the pharma sector. Meanwhile, Commerce VIIV HeaLtHcaRe SeeKS PaRtneRS for medical devices because of divergent buoyed by strong demand, improved and Industry Minister Anand Sharma said fOR HIV dRUG In IndIa views on some of the GHTF standards. that FDI in new pharma projects would spending on healthcare and rising middle- In yet another attempt to drive down costs, India is also trying to align its rules with the continue and only those Indian companies class incomes. Industry experts expect the global drug maker ViiV Healthcare (a joint International Conference on Harmonisation that receive government funds for research trend to continue, with market growth for venture that houses the HIV/AIDS drugs (ICH) guidelines for drug regulators, , though could face a curtailment of their funding. 2011 forecast in the range of 15−17%. business of GlaxoSmithKline Pharmaceuticals not favouring simple adoption. Indian industry and Pizer, Inc.) is evaluating the scope sources say strict adherence to ICH guidelines MInIStRIeS deBate fdI In cIPLa In taLKS WItH GSK tO of local partnerships in India. One of the will help big pharmaceutical companies, but SUPPLY dRUGS potential organisations is Natco Pharma, prove to be a barrier for the growth of smaller PHaRMaceUtIcaLS which has sought a voluntary licence to make ones owing to the cost involved in such trials. Indian drug maker Cipla Ltd is said to be In pharmaceuticals, 100% foreign direct a low-cost version of the drugs. According to in talks with drug companies including investment (FDI) is permitted but there Viiv Healthcare, the local partners could be GlaxoSmithKline and Israel’s Teva to has been a debate within the Indian either for manufacturing or for marketing. HeaLtH InSURance PORtaBILItY government, the Ministry of Health and supply generic drugs. Cipla, India’s IntROdUced In IndIa second-largest pharmaceutical company If the deal goes through, this could Family Welfare arguing that acquisition The Indian insurance sector regulator by market value, has been in negotiations ultimately lead to the irst case in which a of Indian pharmaceutical companies by (IRDA) has approved a proposal to allow with GlaxoSmithKline for a few months compulsory drug licence is imposed for the multinationals could orient them away customers to switch health insurance policies for a number of speciic products. Indian domestic market. The controversial from the Indian market, thus reducing to an insurer of their choice. Though this provision under which the Indian government the domestic availability and increasing Cipla, with a market value of $5.5 billion, move is expected to provide customers can allow a generic drug maker to make the prices of the drugs they produce. The is one of the world’s biggest producers with more choice, market experts feel that a low-cost version of a patented drug by ministry is also concerned that takeovers of low-cost antiretroviral drugs to ight it is unlikely to lead to a signiicant fall in paying a fee is opposed by foreign drug might skew the market structure, which HIV and AIDS. The company provides premium rates. With rising medical costs makers, but is allowed under local laws. means a clutch of companies dictating AIDS drugs to African companies for just and a high inlation rate, most health prices of drugs that are critical for dealing $350 per year per patient, compared with insurers are just covering costs on their with public health concerns, including $10,000 charged by multinationals. tOUGH neGOtIatIOnS OVeR health portfolio in this competitive market. diseases like HIV/AIDS and Hepatitis C, HeaLtHcaRe nORMS IndIa−eU fta thus impacting the government’s ability to Global drug makers such as GlaxoSmithKline provide affordable healthcare to the masses. and Pizer are increasingly looking to It has been reported that as a part of the low-cost destinations like India to tie ongoing India–EU Free Trade Agreement

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RecKItt BencKISeR tO BUY IndIa’S team of scientists to provide a world-class BUSIneSS OPPORtUnItIeS INVESTMENT PaRaS PHaRMaceUtIcaLS fOR $726 discovery service operating out of the The life sciences and healthcare sector MILLIOn state-of-the-art research centre in India. is a very wide sector. According to a This deal will not only help Piramal boost UPDATE According to market sources, British recent study undertaken by UK Trade its research capability but will also allow irm Reckitt Benckiser has agreed to buy & Investment, the key potential for it to use the Cambridge ofice for project privately held Indian over-the-counter business and technology collaboration SMItHS MedIcaL SetS UP management support and access to the medication and personal care company, between the UK and India includes: SUBSIdIaRY In IndIa UK and the wider European market. Paras Pharmaceuticals, for about $726 • Medical education and training On 17th January, Smiths Medical, a UK- million, beating off rivals and paying what headquartered leading global medical is thought to be a steep price for more QUIntILeS tIeS UP WItH aPOLLO • E-health and remote diagnostics device manufacturer, formally established access to a fast-growing market. The HOSPItaLS fOR IndIan PHaSe I a wholly owned subsidiary in Mumbai. The • Stem cell production and research research base and the market potential in cLInIcaL tRIaLS company said, ‘We have had a presence India are the main attractions for foreign • Further development of health for over 20 years in India through our players in the Indian healthcare sector. Global clinical research organisation CRO insurance provision strong distributor network. Our aim in Quintiles has recently announced its foray establishing Smiths Medical India is to Private equity irm Actis will sell its 63% into the Indian Phase I clinical trials space. • Improvement in health service design, continue to leverage that network, while also stake in Paras to Reckitt Benckiser. Other As part of its entry into India, Quintiles, especially for the public sector growing our direct-to-customer business.’ shareholders, including Sequoia Capital and which has operations in 60 countries, has • High-end medical equipment Paras founder Girish Patel and his family, will tied up with integrated healthcare company and technology Smiths Medical, a UK-headquartered also sell their stakes to the British company. Apollo Hospitals Group − which has 8,500 beds and 100 diagnostic clinics across • Bio-informatics leading global medical device Reckitt has been investing in the fast-growing India − to set up a £5.5 million Phase I manufacturer, formally established non-prescription pharmaceuticals sector • Clinical trials clinical trials facility in Hyderabad. This over the last 4 years, buying Boots’ over-the- a wholly owned subsidiary in facility will be linked to Quintiles’s other There is also signiicant opportunity for the counter business in 2006 for £1.9 billion Mumbai. The company said, three global facilities located in London, two countries to work together in the areas ($3 billion), the USA-based Adams cough Kansas (USA) and Uppsala (Sweden). of Public Private Partnership (PPP) to set up ‘We have had a presenc medicines company in 2008 for $2.3 billion healthcare infrastructure as well as service (approx. £1.45 billion) and in 2010 the SSL While the Hyderabad facility will be provision. India is also keen to work with UK Durex condoms group for £2.5 billion. Speaking at the launch, the UK’s Secretary primarily driven by Quintiles, Apollo regulators and gain from their experience. of State for Business, Innovation and Hospitals will be providing infrastructure Skills, the Rt. Hon. Vince Cable MP, said, support. Quintiles will hold a 60% stake ‘This represents an exciting step forward PIRaMaL BUYS OUt caMBRIdGe in the Hyderabad facility, and Apollo the in the investments that Smiths Group plc SPIn-Off remaining 40%. Although Quintiles has is making in India. It is a ine example According to news reports, Oxygen been carrying out Phase II and III trials in of the business ties that we would like to Healthcare (O2h), the Cambridge Science India for the last 14 years, this venture will see between India and the UK. The UK’s Park starlet, has been acquired by Indian mark its foray into the Phase I space. high-end technology expertise is second pharmaceutical giant Piramal Solutions. to none in the world and companies like O2h has emerged from the Cambridge Smiths are a good example of this.’ Science Park, UK, and developed a talented

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COMPANY PROFILE - Biocon

Established in 1978 and Biocon Limited and its two subsidiary molecular biology in early stage drug and social responsibility. As India’s irst and headquartered in Bangalore, companies, Syngene International Limited discovery and development. Clinical leading biotechnology company, Biocon and Clinigene International Limited, form research (Clinigene) is carried out by extends its support to numerous community biotechnology company Biocon has a fully integrated biotechnology enterprise clinical studies and clinical trials. outreach and corporate citizenship initiatives, evolved from an enzyme company to specialising in biopharmaceuticals, custom with special concentration in the areas of a fully integrated biopharmaceutical research and clinical research. Biocon’s Biocon in its 32-year history and healthcare, education and environment. enterprise, focused on healthcare. integrated business approach has enabled is focused on exports of both The Biocon Foundation, set up in 2004, In 2007, Biocon made a strategic the company to establish a signiicant biopharmaceutical products has launched Arogya Raksha Yojana, a presence in the global biopharmaceutical unique health initiative for rural India. decision to divest its historic enzymes market via its product offerings and and research services. Biocon aims to continuously create growth business to Novozymes A/S of customised, high-value solutions at any in different areas of the company and is the stage in the lifecycle of a drug,- from Biocon Park, inaugurated in June 2006 Denmark. Biocon now strategically irst company globally to manufacture human discovery to market. Biocon’s vision is by the then president, A P J Abdul Kalam, focuses its activities on its biopharma insulin, Insugen®, using a Pichia expression to be an integrated biopharmaceutical comprises an integrated cluster of research system. In addition, in 2006, Biocon launched business verticals, which include enterprise of global distinction. laboratories and manufacturing facilities BIOMAb EGFR™, the irst indigenously APIs, biologicals and proprietary laid out on a 90-acre site near Bangalore. The company applies its proprietary developed humanised monoclonal molecules, both commercialised Built with a total investment of Rs 650 crores fermentation technologies to make effective antibody for head and neck cancer. (approximately £90 million), with further and under development. With this and innovative biomolecules in diabetology, investments to follow, Biocon Park is the ‘Our ability to continuously scale new divestment, the company mission oncology, cardiology and other therapeutic single largest capital investment made by heights across the biopharmaceutical value segments. Biocon’s products in the is to ‘develop novel and affordable Biocon in its 32-year history and is focused on chain enables us to realise the promise of biopharmaceutical category include: anti- biotherapeutics for global markets’. exports of both biopharmaceutical products future therapeutics.’ − Kiran Mazumdar- diabetic agents, anti-hypertensive agents, and research services. The multi-product Shaw, Chairman and Managing Director anti-inlammatory agents, antioxidants, facilities mainly cater for the following biologicals, cholesterol-lowering agents, (Source: Biocon – http://www.biocon.com/ ) disease segments: cardiovascular, cholesterol haemostatic agents, hepatoprotective reduction, immunosuppressants in organ agents, immunosuppressants, transplantation, diabetes and cancer. nutraceuticals and orthopaedic agents. Biocon’s success has been characterised by With its strong focus on R&D, Biocon offers an enduring set of corporate values based services in custom research (Syngene) on innovation, integrity, strong leadership in the ields of synthetic chemistry and

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