In FY2014, India exported almost as much insulin (in medicine form) as it imported
From Tom Hanks to Wasim Akram and Halle Berry to Arun Jaitley, insulin helps millions of people all around the world lead a normal life and go about doing what they love to do. This also means that it’s a multi-billion dollar industry, in which Indian companies are starting to make their presence felt Shakti Shankar Patra | @TheDollarBiz
Meet 10-year-old Sravanthi as she gracefully walks into her class at St. Ann’s High School in Hyderabad, or when she acts her age at home in Chandan Nagar, and you will get no idea that she is diabetic and is dependent on medication for the last six years. In fact, meet her even while she waits for her turn, with age-defying patience, at Hyderabad’s famous Nizam’s Institute of Medical Sciences (NIMS) and you won’t still get the idea. This, all thanks to insulin – science’s answer to diabetes.
After examining Sravanthi and hundreds of other diabetics of all age groups, Dr. P. V. Rao, Endocrinologist at NIMS, told The Dollar Business, “Modern diabetes treatment has made it possible for diabetics to lead an absolutely normal life.” Talking about the Endocrinology Department at NIMS, Dr. Rao adds, “Other than thousands of adult diabetics, our institute takes care of 300 diabetic kids and provides free insulin to many of them.” Free? Isn’t insulin a very expensive drug, most of it being imported from the West? Dr. Rao answers this with a smile. And when one digs into data to find the reason behind Dr. Rao’s smile, one is left a bit embarrassed to have asked the question.
A student of St. Ann’s School in Hyderabad, little Sravanthi is surviving on insulin for the past six yearsHidden fact
Ministry of Commerce data reveals that India was actually a net exporter of insulin (in medicine form) until as recently as FY2006. And although imports have since risen, so do have exports. This means that in FY2014, India exported almost as much insulin (in medicine form) as it imported – a fact that even a lot of endocrinologists, who have spent all their life recommending insulin from MNCs like Novo Nordisk, Eli Lilly and Sanofi, find it hard to believe. What India does import in much higher quantities than it exports is insulin in raw form, mostly insulin crystals.
For life...
Insulin is a hormone that the pancreas release when blood sugar levels in our body rise. This generally happens after eating as the body converts the food into sugar or glucose. The insulin generated by our pancreas then helps this sugar to reach the cells. If our body, for some reason, fails to generate enough insulin, the sugar thus generated, instead of going to the cells, accumulate in our bloodstream, leading to hyperglycemia or at higher levels, diabetes. The treatment of diabetes, thus, involves providing the body with insulin from an exterior source. Until the 1980s, this exterior source of insulin was pig meat or to be more precise, pig pancreas. The trouble with insulin made from pig pancreas was that the human body knows how to differentiate between human insulin and that derived from pigs and so it used to be not so friendly in accepting the latter.
After years of research, biotechnologists managed to address this issue by producing the first human insulin, which was introduced in the market in 1982 by Eli Lily. This brought about a tectonic shift in the treatment of diabetes. Today, modern insulin (insulin analogues) is, generally, differentiated by the amount of time taken by it to reach the bloodstream from the moment it is injected (onset) and the time taken for all of it to be absorbed by the body (duration). So, we have the rapid-acting insulin analogue, which has an onset of 10-15 minutes but a duration of just a couple of hours; the long-acting insulin analogue, which takes a full hour for onset but has a duration of almost 24 hours, and several other varieties. 
Dollar deluge
Rising prevalence of diabetes all across the world means that insulin has become a multi-billion dollar industry, with Danish pharmaceutical major Novo Nordisk being the market leader. In fact, Novo Nordisk’s dominance in the insulin market can gauged from the fact that it had a revenue of DKK 83. 57 billion in 2013 (about $14.4 billion), of which DKK 65.45 billion (about $11.2 billion) came from diabetes care alone. And if one goes by estimates that suggest that the global insulin market is worth about $20 billion, it’ not too hard to figure out the Danish Company’s dominance of this segment of the pharmaceutical industry.
Flag bearer, live saver The Indian insulin market has always been dominated by MNCs. But taking them head on now is Biocon, which was the first Indian company to launch human insulin in 2004. Pricing its insulin at “half the prevailing price”, Biocon “compelled MNC brands to drop prices, which hugely benefited patients.” But is Insugen® – the brand name for Biocon’s insulin – as good and effective as its more glorified peers? That’s a billion dollar question, literally. 
When Dr. Rao of NIMS was asked this question, he said, “Although during clinical trials under a controlled environment, Insugen® is not at all inferior to any MNC insulin brand, there is an appreciable difference, when it comes to a clinical state.” However, Shukrit Chimote, Head, Brand Formulations, Biocon, doesn’t agree with Dr. Rao. “Insugen® has been approved by regulators in 55 countries. It is impractical to expect that an insulin which works in a clinical setting will not work as well in a real life setting,” Chimote told The Dollar Business. He added that Insugen® is used by over four lakh patients in India, which could not have been the case if it were inferior. Quite logical, one would imagine. Other than Biocon and the MNCs, Torrent Pharmaceutical is also a reasonably big insulin player in India. But Torrent is not an insulin producer.
By virtue of an agreement Novo Nordisk, Torrent just formulates, packages and markets the former’s insulin in India. This kind of arrangement was how Novo Nordisk operated in India for decades. But since 1994, apart from marketing tie-ups like the one with Torrent Pharmaceuticals, Novo Nordisk is present in India through a fully owned subsidiary – Novo Nordisk India Pvt. Ltd., which has a R&D unit and a marketing arm but doesn’t have a production facility. But little Sravanthi doesn’t understand all this. She doesn’t care who makes what. She has little patience to count the number of digits Novo Nordisk or Bio-con’s topline consists of. All she knows is that NIMS has helped her with free insulin since she can remember and that’s helping her to live life just like any of her friends. And if one sees her bright eyes and broad smile even after waiting for hours to meet Dr. Rao, one can’t but agree.
Trying to change the mindset of a country that still believes ‘imported’ and ‘superior’ are synonymous is Biocon – first Indian company to produce human insulin. To understand if the mindset has changed and to know all that’s insulin, The Dollar Business caught up with Biocon’s Head of Brand Formulations, Shukrit Chimote
Shukrit Chimote, Vice President and Head, Branded Formulations (India), BioconTDB: Being the first domestic insulin manufacturer, how would Biocon describe the Indian market, which is dominated by MNCs?
SC: The market for diabetes therapy in India is growing rapidly. IMS predicts India will be the 8th most valuable diabetes market in the world by 2016, up from 15th in 2007. Sales of diabetes medicines are expected to be worth Rs.22,700 crore by 2020, according to a prediction by Barclays. Although the Indian market is a highly competitive, Biocon has been steadily increasing its market share. Currently, Biocon is ranked at No.4 behind Novo Nordisk, Sanofi and Eli Lilly, thus being the leading domestic insulin player. However, from a growth standpoint, Biocon is the fastest growing insulin company, growing at 34% (as per IMS July’14 MAT). While the Indian insulin market has been a challenging one, driven by investment demands in patient acquisition, Biocon has been able to maintain its strong market growth with a focus on building brands through well-defined ‘stakeholder’ value propositions.
TDB: What is the basis for your claim to be the No.1 insulin brand in India? Is it in terms of volume or value or some other parameter?
SC: In the Indian insulin market consisting of close to 10 players, the MNC:Indian ratio is 50:50. Among Indian companies, Biocon ranks one in terms of both value and volume. From an overall standpoint as well, Biocon ranks one in value market growth.
TDB: There’s a view that Insugen is good in clinical trials under a controlled environment but has been found wanting in a clinical state. How would you respond to this?
SC: This is incorrect. Insulin as a product is titrated prior to administration based on patient requirements. It is impractical to expect that an insulin which works in a clinical setting will not work as well in a real life setting. At any point in time, there are over four lakh patients who benefit from Biocon’s Insugen in the Indian market. It is difficult to have this scale of market penetration if the product is found wanting. Biocon’s Insugen is backed by clinical trials in India and Europe. The outcome of these trials indicate that Insugen is at par with the innovator in quality, safety and efficacy. Besides being a domestic leader, Biocon also enjoys tremendous success with its insulin in international markets, where regulators have reviewed Biocon’s clinical data and approved the product for patients in over 55 countries. Furthermore, it is important to reiterate that as India’s first indigenous insulin manufacturer, Biocon has been addressing a very large need for affordable insulin therapy in the country through its generic rh-insulin brand Insugen® and insulin analog Glargine brand BASALOG®.
TDB: Give us a sense of Biocon’s pricing power in India when it comes to insulin.
SC: Although insulin is under price control in India, prices of imported insulin brands are higher than indigenous brands like Biocon’s Insugen, as the government has a higher ceiling price for imported products. Even in the analog insulin segment, Biocon is more affordable than its competitors. Biocon has continually strived to make diabetes management affordable for patients in India.
TDB: Would you call the NPPA’s policy vis-à-vis insulin imports fair? How has it impacted domestic prices?
SC: The NPPA’s policy has defined a lower ceiling price for indigenous insulin vis-à-vis imported products. Unfortunately, in reality, many of these companies are using this price differential to mislead users by establishing that imported products are superior in quality as compared to indigenous products and hence, are expensive. Considering that margins for imported products are decided based on the landing cost of these products, the production cost of imported medicines should be verified and not just be based on the company’s data. A company like Biocon has made huge investments towards research and development of this product as well as setting up world class manufacturing capabilities to ensure that the product quality is comparable with global best standards but keeping the cost at an affordable level thus challenging the premise of ‘high quality = high price.’
TDB: The import duty on insulin in medicine form is lower than that of insulin and insulin salts. Is it in some way a reflection of domestic incapability to cater to demand?
SC: Biocon does not import insulin, hence would not like to comment much on the difference in import duties. But it is suffice to say that differential import duty has existed for a long time and has no relation to capacities of local Indian manufacturers. Biocon has invested heavily in expanding insulin manufacturing capacities at Bangalore in order to cater to growing demand of its rh-insulin. Considering the fact that Biocon is exporting insulin to several countries, it has sufficient volume to cater to domestic needs. Additionally, the company has also invested $200 million in setting up Asia’s largest integrated state-of- the-art drug substance and drug product insulin manufacturing facility in Malaysia. This additional capacity, once ready, will enable catering to the growing global commercial footprint of Biocon.
TDB: Give us a sense of your insulin exports in terms of geographical spread, margins and volume.
SC: Biocon’s rh-insulin is approved in over 55 countries and Insulin Glargine is approved in over 10 countries. Biocon does not comment on margins and volume.
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