An ERM

Report
On

Pharmaceutical Industry

Submitted by

Submitted to

Anshul Vuppuloori

Prof. L. Giridhar

1226114104

and

MBA IB (2014-16)

Prof. Kalpagam

Introduction

The pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals for
use as medications. 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.
Pharmaceutical Industry in India
The number of purely Indian pharma companies is fairly low. Indian pharma industry is
mainly operated as well as controlled by dominant foreign companies having subsidiaries in
India due to availability of cheap labour in India at lowest cost. In 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 Russia. Most of the players in the market are smallto-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. Home-grown 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 a modest 12% share, but it has been
growing at approximately 10% per year. India gained its foothold on the global scene with its
innovatively engineered generic drugs and active pharmaceutical ingredients (API), and it is
now seeking to become a major player in outsourced clinical research as well as contract
manufacturing and research. There are 74 US FDA-approved manufacturing facilities in
India, more than in any other country outside the U.S, and in 2005, almost 20% of all
Abbreviated New Drug Applications (ANDA) to the FDA are expected to be filed by Indian
companies. Growth in other fields notwithstanding, generics is still a large part of the picture.
London research company Global Insight estimates that Indias share of the global generics
market will have risen from 4% to 33% by 2007. The Indian pharmaceutical industry has
become the third largest producer in the world and is poised to grow into an industry of $20
billion in 2016 from the current turnover of $12 billion.
Pharmaceutical Scenario Worldwide
For the first time ever, 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.(pdf) 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 antiinflammatory drug Humira being the best-selling drug world wide 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.
Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at the top 10
pharmaceutical companies as a result of slowdown in R&D innovation and the expiry of
patents on major products, with 19 blockbuster drugs losing patent.[99] As the number of
patents that expire accumulates faster than the number of marketed drugs, this amount is
expected to increase even more in the near future.
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 sales people (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. Marketing of prescription drugs in the US is
regulated by the federal Prescription Drug Marketing Act of 1987.
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.

Risk Analysis

Governance
Setting the policies, structure and objectives for an organization and overseeing progress
toward those objectives.
In short, this means taking care of business, making sure that things are done according to an
enterprises standards, regulations, and board of directors decisions.
It also means setting forth clear stakeholder expectations of what should be done .

Guidance for Industry ICH 09, Quality Risk Management

Guidance for Industry ICH Q8(R2), Pharmaceutical Development
Eudralex
The Rules Governing Medical Products in the European Union Volume
EU Guidelines to Good Manufacturing Practice
Medical Products for Human and Veterinary Use Annex 20
Quality Risk Management

Risk Management
Managing the risk, organizations are exposed.
Eg. Operational, financial, strategic and regulatory risk. It also covers the management of key
risk indicators and the tracking and recovery of related losses.

About 45% of the recalls of drugs and devices are due to design problems
Many of the design problems create risk
Many design risks are ignored by drug manufacturers who think that only positive
thoughts are permissible
You cannot rely on operator effectiveness
The more you rely on operators, the greater the chance of problem as operators are
never 100% effective.
You cannot assume that patients will follow directions

Compliance
The management and monitoring of compliance with the organizations own required policies
and procedures.
It includes reporting of regulatory and policy breaches, management of their remediation, and
communications between the organization and the regulator.

Devices have clear requirements for risk analysis

FDA expects drugs to also have design controls
A Design Control and Development Plan should also include risk Management Plan
Regulatory agencies expect you to think about risks associated with manufacturing
and from the patients point of view
To obtain a licence, you must show that risks have been considered
Also, during manufacturing you need to consider risks when performing validations
and dealing with OOS situations.

ERM Strategy

Consider the risks associated with the potential misuse of your product, including
consequences of deliberate misuse both innocent and criminal
When performing a validation, consider the risks associated with the failure of a step.
o This should be done when developing the validation plan as this will tell you
what needs to be covered by the validation study.
In an Out-of-Specification situation, consider the risks associated with the failure if it
is true.
A risk with very low probability but severe consequences must be considered.