Partnering for Biosimilar Security: India's Role in US Health Care Savings, Supply Chain Stability

Indian pharmaceutical companies are responsible for providing a substantial proportion of drugs to US residents, with Indian companies supplying 4 of every 10 prescriptions filled in the US in 2022, according to a new report from IQVIA.

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The purpose of the report was to quantify the contribution of Indian corporations to the American health care system, highlighting concerns around lack of diversification in the manufacturing of key starting materials (KSMs) and active pharmaceutical ingredients (APIs) as well as ways India could work with the US in reducing supply chain risks.

“The supply of affordable medicines is crucial for the overall health of US residents and managing chronic health conditions. Indian pharmaceutical companies play a critical role in supplying affordable medicines that enhance patient access, improve management of health conditions, and bring savings and sustainability to the overall health system. Concerns around the geographic consolidation of manufacturing of [KSMs] and [APIs] supply chain provide further opportunity for Indian companies to partner with the US in de-risking the supply chain,” wrote the authors.

Overall, medicines from Indian companies generated $1.3 trillion in savings to the US health care system between 2013 and 2022, $219 billion of which were accumulated in 2022 alone. Indian companies supplied more than half of all medications for hypertension, mental health, lipid regulators, nervous system disorders, and antiulcerants. Forty-seven percent of all generic prescriptions and 15% of all biosimilar prescriptions filled in the US are supplied by Indian corporations.

The COVID-19 pandemic caused a multitude of drug shortages across the world, spotlighting vulnerabilities in the current global pharmaceutical supply chain, including concerns about lack of diversification of materials used to make generic drugs. Overall, 87% of FDA-registered plants that make APIs used in generics are located outside of the US, and much of them are produced in China. Sourcing KSMs and APIs is also a concern for the US indirectly in that although India is the main source of generics for the country, 70% of its APIs come from China. Countries in Europe have similar supply chain structures.

The report summarized the history of partnerships between the US and India to strengthen the pharmaceutical supply chain, calling India “an important ally.”

“India’s history of supplying high-quality affordable medicines and collaborating with US companies positions India well for future engagements with the US health system as a key partner in the uninterrupted supply of these drugs.… Such bilateral and multilateral trade initiatives and partnerships can bolster economic growth, national security, supply chain resilience, and technological innovation, and provide frameworks that can be used for future partnerships,” commented the authors.

The authors suggested several policy initiatives and interventions that could improve this partnership and reduce supply chain risks, such as:

• Bilateral trade arrangement
• Providing incentives from the Indian government to build a reliable supply chain
• Scientific collaboration
• Technology upgrades

Bilateral trade arrangements could be achieved by granting India preferred status by adding it as a designated country under the Trade Agreements Act. Additionally, establishing a joint pharmaceutical supply chain working group featuring representatives of key government departments and regulatory bodies could be helpful in setting up appropriate partnerships for the future.

India is actively encouraging investment in the production of APIs and KSMs through initiatives like bulk drug parks and production linked incentive schemes. These efforts aim to reduce dependence on single sources for India and other countries. This strategy could enhance US supply security, potentially granting India access to technologies and intellectual property in areas where shortages exist, such as critical raw materials for vaccines and biologics.

The authors concluded, “The US has a pressing need to address bottlenecks in its API supply chain. Enhanced strategic partnerships with allied countries could offer benefits beyond cost savings, such as vertically integrated production, high quality, and reliability. India can be a strong candidate for such a partnership, as a reliable and significant contributor to the US drug supply chain.”

Reference

U.S.-India Medicine Partnership: India's Contribution to the U.S. Healthcare System. IQVIA. April 30, 2024. Accessed May 9, 2024. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/us-india-medicine-partnership