Insulin: India at loss in global trade

The cruel irony is that insulin manufactured by Indian firms have not yet earned trust of Indian doctors, patients.

India - often referred to as the pharmacy of the world – supplies one third of the world’s medicines at cheapest prices. Many countries and international healthcare development agencies rely on India for their medicine supply.

Doctors Without Borders (Médecins Sans Frontières') source as much as 80% of their HIV medicines supply from India. Therefore, it is surprising that India has failed to challenge the oligopoly in global trade in insulin. Even more puzzling is the fact that even a century after insulin was first used to treat diabetes, it remains inaccessible to millions globally.

Studying the private sector insulin market in Delhi, Abhishek Sharma and Warren Kaplan of Boston University in a recent issue of BMJ Global Health  concluded that India, despite having its own insulin production capabilities, performs dismally in making its own insulin available to Indian patients. Access to insulin  in pharmacies in Delhi, for example, is poor. Insulin is sold at unaffordable prices when compared to the World Health Organisation (WHO) benchmark.  Indian companies like Biocon and Wockhardt have been manufacturing insulin in India and even exporting insulin products.

Only three pharma giants (Novo Nordisk, Sanofi and Eli Lilly) control the bulk of global insulin production and supply. Denmark, France and Germany exported 85 to 96% of global retail insulin (by value) during 2004-2013, according to ‘Insulin Trade Profile’ report by Sharma, Kaplan and their colleagues at Boston University.

As the unmodified human insulin protein is no longer patentable, market leaders maintain their dominance by fashioning incremental changes to the insulin protein and obtaining patents. Further, the more expensive, “tweaked” versions of human insulin – known as insulin analogues – come in patented combinations that include a delivery device.

“I can’t see how a newer valve or cap is a real biomedical innovation that is worthy of patent protection” says Kaplan. “It’s just a ruse to extend market monopoly.”   The manufacturers assert that these analogues have the advantage of fewer, less painful injections per day, and greater convenience. Such insulin analogues, in patented delivery-device combinations, cost 5-9 times more (in Delhi) than human insulin.

Are these insulin “analogues” better? There are papers claiming this but the US Food and Drugs Administration, the last word in pharma affairs, has formally declared that insulin analogues are not better in treating the disease. The WHO is of the same opinion. The cruel irony is that insulins manufactured by Indian companies have not yet earned the trust of Indian doctors and patients. This trust deficit is in sharp contrast with objective reality. Biocon’s insulin glargine (an insulin analogue) has already been launched in Japan, a country well known for its very strict policy on medicine imports. Biocon has also entered the Malaysian market.

The National Pharmaceutical Pricing Authority (NPPA) allows imported medicines a mark-up margin over manufacturing cost (35% if a local version exists, else 50%) to cover distribution/sale costs and profits. For years, foreign companies received 50% margins despite Indian insulin products already in the market.

They claim that insulins are biologics (not small molecules) and cannot be treated as equivalent unlike small molecule generics. Further, for imported products, the NPPA calculates mark-up margins as percentage of the inflated landing prices. “What makes it worse for Indian companies is that NPPA price controls are stricter for domestic insulins than their imported equivalents. Sub-optimal policy framework and lack of transparency in declaring production costs allow foreign companies to generate higher revenues, financing their aggressive marketing strategies, leading to oligopoly,” says Sharma.

Direct sales

The problem does not end there. The BMJ Global Health study found that only 25% of the pharmacies in Delhi stocked human insulin manufactured by Indian companies. One wonders how the “Make in India” policy has overlooked this incongruity.  This, Abhishek and Kaplan argue, could be a result of multinational companies supplying insulin directly to patients through doctors. This strategy works well because manufacturers can offer the patient a discount.

Consequently, the retail pharmacies find it unprofitable to stock insulins, especially the less expensive brands. Having sidestepped the pharmacies, the supply chain becomes fragile, further strengthening the oligopoly. The oligopoly of insulin trade and the global dependence on imported insulin from three or four manufacturers, operating from very few countries, is in complete contrast with most of the other life-saving medicines like antibiotics.

The global insulin supply chain is even more fragile for smaller and poorer economies which depend on imports from very few countries. Any disruption in imports would mean death to many. Despite having surmounted the regulatory rigors of Japan and Malaysia, it is unfortunate that Indian healthcare professionals ignore the affordable opportunity offered by these indigenous insulin products. Policy makers would do well to check for bioequivalence between standard insulin products.

(The writer is a professor at Manipal University, Manipal)