When two large-scale Indian drug firms recalled drug products from the US market in the summer, the FDA raised serious concerns as both companies had already recalled other products earlier this year. With the quality of manufacturing practices being called into question, CTA Editor Henry Kerali spoke with Rakesh Shah, director of Supply Chain Management at Merck Serono in India, to gain an expert opinion on the major issues facing the Indian pharmaceutical industry.

Henry Kerali: What are the biggest challenges the Indian pharmaceutical industry faces?

Rakesh Shah: There are a number of challenges facing the industry. We know that India is a manufacturing hub for pharmaceutical products. However, local pricing, the environment, inflation, and currency fluctuation represent just some of our biggest challenges.

When the product has been shifted from the manufacturing plant to the end customer, the temperature of the product has to be maintained as per the label claim. And this is the challenge, from a supply chain point of view and a product point of view. As an industry, we need to strengthen this area across the board to ensure we hit the quality parameters, and ensure products are being handled correctly to avoid product recalls.

HK: So what other issues need to be improved upon?

RS: Good manufacturing practices and good distribution practices need to be improved. We need to strengthen this area and build quality parameters to maintain product quality and temperature control. Sometimes product behaviour is adversely affected by the extreme temperature conditions in India.

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I believe companies who have undergone drug recalls in the past are not necessarily doing things wrong, but it is important the industry finds out where the parameters are failing before we can make comment or make the necessary changes.

HK: Could you give an overview of the supply chain landscape in India?

RS: The Indian market is a cheaper market than Europe and the US, so companies spend huge amounts of money on account of GMPand GDP. That is a big challenge because competitors are selling it at a much cheaper price.

But the industry continues to grow. According to the recent McKinsey report, the Indian pharmaceutical market has been growing steadily at rate of around 10 – 14 per cent in the last few years. And that growth has been seen in medical infrastructure and health insurance coverage, among other areas.

However, we are dealing with a very low price selling market. Since India is such a hugely populated country, the government wants low cost medicines to encourage competition, of which there is a lot here – in the generics market, specifically. Compared to Europe and the US, government spending within this space is very low, so a more holistic view is required from the Indian government to move forward in this industry.