Regulatory Framework for Generic Drugs: A Case Study on Lupin

In this assignment content, the importance of quality standards in the pharmacy sector is highlighted with a focus on Lupin Ltd. The company has adopted Good Manufacturing Practices (GMP) to ensure the quality and safety of its drugs. The price regulations are also crucial to prevent greedy companies from making unreasonable profits out of basic human necessities. Clinical trials provide a certain level of surety that the drugs are safe for human use. The assignment content also emphasizes the importance of following international quality control regulators to avoid wasting time, money, manpower, and infrastructure resources. In summary, the price regulations are important to prevent greedy companies from making unreasonable profits out of basic human necessities, and quality controls are set in place to ensure the safety and efficacy of drugs.

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Report on Regulation effectiveness in pharmaceutical sector
Lupin Limited
Introduction
Lupin Limited is a pharmaceutical company; its head quarter is in Mumbai, India having its presence in
different locations globally. It is the 7th largest in terms of market and 10th largest in globally revenue
generating as a generic Pharmaceutical company. It is one of the fastest growing Company in USA and
Japan in the generic Pharmaceutical industry. In the terms of market share in prescription it is ranked 5th
major Pharmaceutical Company in USA and 3rd largest in India in the terms of generating revenue.
A former professor from BITS Pilani Institute in Rajasthan, India was the founder of this company; the
company gained its wide popularity by selling tuberculosis drugs worldwide. In present the company has a
noteworthy crucial share in market in the field of Diabetology, pediatrics, Anti-infective, GI, CNS
cardiovascular (prils and statins), NSAIDs and asthma segments. It is a renowned globally leader in
Cephalosporin and Anti-TB segments. The Research and Development of the company accomplishes a
significant result in the process of its newly found chemical program. Company’s venture into an advance
system of delivery of drug and has evolved in development of technologies platform which are used to create a
value addition in the generic pharmaceuticals. The manufacturing facilities of the company are wide spread in
India and Japan and have also played a very important and vital role in facilitating the company to comprehend
aspirations globally.
The company’s drugs reach 70 countries across the globe with its presence in USA, Europe, Japan & Australia.
It has huge presence in emerging markets such as India, the Philippines and South Africa as well. Its drugs
range from branded drugs, APIs, advance drug delivery systems to biotechnology. Lupin’s business comprise
of entire pharmaceutical value chain.

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Table of contents
Particulars Page No
 Reasons why regulations are important in pharmaceutical company………………………….….3
 How are quality standards included in regulation…………………………………………………3
 Assessment of effectiveness of regulation in pharmaceutical sector……………………………...4
 Measures that could improve the profitability of the company along with evidences……………5
 Summary…………………………………………………………………………………………..5
 Reference………………………………………………………………………………………….6

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1. Importance of economic regulation in pharmacy sector
Price regulation:
There is a high rate of entry in pharmaceutical industry. This shows that it is structurally
competitive. To the extent market have high consumption rate for the drugs manufactured, the
patents taken by the company justifies the R&D costs spent by the company. Even though the
patent bar is generally an equivalent product in the life of patents, however they do not stop
the entry of like products that may be therapeutic players. Thus, its neither an usual
monopoly, and nor the patents provide offers any principle for regulating pharmaceutical
prices.
The rational for drug pricing derives its importance from the fact that a need of a drug may
make a company/supplier of drug to charge exorbitant pricing which may make it impossible
for patients to buy without draining out there substantial financial sources. It consequently
becomes the job of the government to regulate the prices in such manner that it is beneficial
not only to company, but also affordable to the public at large depending upon the
consumption of the drugs.
This is also rational because companies with low ethical standards may charge unreasonable
prices from patients even when their overall cost of making the drug is low or easily
recoverable. If the pricing regulations are not kept in place, then this could result in severe
over charging. The government has to in such case come up with certain measures so that the
consumers, suppliers and manufacturers are all promoted. Companies may make reasonable
profits out of its pains both in manpower and resources. The patient may be able to get the
reasonable pricing for the medicine he seeks for the treatment of its diseases. It is very
difficult and so, special regulatory authorities are assigned this task.
Drugs which are having huge sales and market share of more than fifty percent are subjected
to price regulation. These drugs are referred to as scheduled drugs. The National
Pharmaceutical Pricing Authority (NPPA) also regulates the pricing of bulk drugs.
For drugs not under price control, firms can set their Minimum Retail price (MRP). The
regulator only interferes in cases where drugs have adequate sales and where annual price
surges by 10%. This shows that the Indian government has elevated itself to a level where it
focuses on making available the generic drugs to patients at affordable prices. This is also
done with a view to keep a check on the profit mongering by the companies.
2. How quality standards included in regulation are important to the pharmacy sector and to
Lupin:
Good manufacturing Practices (GMP) lay down an international guidelines for drug
manufacturing devices for medical purposes to make sure the the quality of products in the

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process of production. In recent years, GMP protocols are being adopted by over 100 countries
either in the form of regulations, directives or guides.
The main objective of Good manufacturing Practices is to minimize the risk associated and related
with the manufacturing of products, their packing, labeling, testing, distributing and so on. These
set of rules are mainly concerned with factors such as drug quality, safety, efficacy and potency.
The importance of quality standards could also be understood in general manner. If the quality
controls are not set in place, then irresponsible companies could overlook the clinical trials which
in return could defeat the very purpose of the drug. It could result in serious side effects which
could do more harm than good. Additionally, the quality standards ensure that a certain level of
surety is obtained before launching a particular drug in the market at a commercial scale. This is
done in general to protect the public at large because pharmaceutical is a very sensitive issue as it
may result in life and death of a person.Lupin conducts itself with uncompromising integrity and
honesty and insists on the highest ethical standards.
Lupin’s association with leading colleges likes American college of Cardiology (ACC), the Ian
Donald School, European Society of Cardiology, etc. has provided latest technical knowhow to
the already thriving infrastructure at Lupin. The key focus of the company has been all about
spreading awareness, providing education in medicine to its patients reasonable enough to
understand the very basics of medicine, teaching society at large for preventive care. Some
examples which can be quoted here are Lupin’s spirometry, CO monitoring camps helping in
asthma/COPD, diabetics etc.
The focus of the company is also on nurturing and maintaining 5500+ product marketing and
sales workforce. This is achieved through extensive training and technical inputs ensuring our
timely tracking of new innovations.
Our systems at Lupin help us to reach the wide base of patients through the network of sound
trained work force.
3. Effectiveness of regulation in quality standards:
The regulations are effective in checking the overall quality of the drugs manufactured and
marketed by the Indian firms. For obtaining approvals of International regulatory bodies, the
regulators from these countries visit Indian labs for awarding approval.
Lupin has several of such approvals from its various drugs in generic and biotechnology areas.
The quality standards set in the regulation not only provides the company a certain level of
satisfaction before launching it into the markets, it opens gateways for international markets as
well.
The drug after obtaining approval of quality from regulating bodies can be exported to
international markets, thereby increasing the profitability of the company and its market presence.
For example- Lupin has focused on making API (Active pharmaceutical ingredients), thereby
being world leader in therapeutic segments such as Cephalosporins, Cardiovascular and the Anti-
TB space for over 15 years.
Continuous focus of Lupin in terms of meeting extreme quality standards has made it a market
leader in several drugs across the globe.

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4. Changes in quality standards to improve the profitability of the company:
In India, the quality standards mainly comprise of CDSCO (Central drugs standard control
organization). Goods manufacturing practices guidelines in India are mainly part of Schedule M
of Drugs and cosmetics Act, 1940.
Even though the guidelines for drug manufacturing in India are at par with the international
guidelines, even then obtaining approval from regulatory bodies of different countries is a must.
This delays the commercial production of the drug for the purpose of export. To avoid delay in
commercial production, the procedures to seek approval should be started at a very early stage.
Quality standards can further be improved in order to protect the consumers from the less tested
drugs or low quality drugs. This can be done by setting up a more technically sound team at
India’s various regulatory authorities to guide the companies in their respective research and
development areas focusing on various generic drugs, biotechnology, cardiovascular, diabetics,
etc. quality standards have to enhanced in the regulation at par with regulators such as FDA in
USA.
Even though our company has a very extensive and in depth research program, but there is always
an area where company can work. It can keep a vigil over the new regulations in quality control
coming across the globe and fulfill its criteria for its ongoing research and development areas.
This will provide the company with the two benefits. First, it will provide ample time to the
research and development facility teams to make appropriate changes in their ongoing research.
Second, it will provide with cost cutting in terms of time spent in doing changes to satisfy the
local or international standards.
This can be understood with a following example- a company A Ltd. is doing its research in
generic drugs for the cure of certain disease. It satisfied its criteria for local government approval
after clinical trials. Then it saw opportunity in international market and decided to promote the
drug manufactured by it in international markets. Let us take example of USA. For selling drugs
in USA, the company needs approval of FDA. The guidelines set up by FDA were not satisfied by
the company manufactured drug. This resulted in decline of permission by FDA. Now, the
company will send the report to its research and development team which will make requisite
changes in the processes which will result in additional cost in terms of manpower, resources
utilized, infrastructure cost in indirect manner. The cost spent in seeking FDA approval is also
wasted. The company in this case could follow a strategy where the research and development is
before hand on international basis. The company could at the time of making research and
development coordinate the same with its sales department so that they could identify the
potential markets. Then, the regulatory framework of the countries for which the market is
identified could be studied by the research team so as to do testing of the drugs accordingly.
5. Summary
The price regulations are important in order to prevent the greedy companies from making
unreasonable profit out of a basic human necessity. The health sector is extremely crucial to the
fair pricing as the drugs are to be used for human cure. The quality controls are set in place so as
to prevent the irresponsible companies from making drugs of poor quality or make drugs with low

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level of clinical trials. Clinical trials provide a certain level of surety that the drugs are safe and
could be further used for cure of diseases with no, minimum, or known side effects. Lupin has
come a long way in being a global market leader in drugs related to cure of TB, diabetics,
cardiovascular, generic and biotechnology. There are always areas for improvement and company
could keep a vigil over the international quality control regulators so as to avoid wasting time,
money, manpower, infrastructure resources. This could also help in achieving the overall vision of
the company in being a market leader at a global level in drugs in various areas at affordable
pricing across all sectors. The company already follows Good Manufacturing Policy framed by
the Indian Pharmacy regulator. There are stringent set of guidelines that the research and
development team has to follow in order to avoid procedural delays and set the best industry
standards.
6. References:
Wikipedia.(2016) Lupin Limited. [Online] Avialable from:
https://en.wikipedia.org/wiki/Lupin_Limited. [Accessed: 17th January 2016]
Lupinworld.com. (2016) Active pharmaceutical ingredients.[Online] Avialable
from:http://www.lupinworld.com/active-pharmaceutical.php[Accessed: 17th January 2016]
Iyer.P., (2008) Regulatory Issues in the Indian Pharmaceutical Industry.[Online] Avialable
from:http://www.nistads.res.in/indiasnt2008/t4industry/t4ind18.htm[Accessed: 17th January 2016]
Indian Pharmaceutical Association.(2016) Regulations and guidelines.[Online] Avialable
from:http://www.ipapharma.org/Regulations.aspx[Accessed: 17th January 2016]
Indian Brand Equity Foundation.(2016) Indian Pharmaceutical Industry.[Online] Avialable
from:http://www.ibef.org/industry/pharmaceutical-india.aspx[Accessed: 17th January 2016]
Wettermark, B., Godman, B., Jacobsson, B. and Haaijer-Ruskamp, F.M., (2009).Soft regulations
in pharmaceutical policy making. Applied health economics and health policy, 7(3), pp.137-147.
Ekelund, M. and Persson, B., (2003).Pharmaceutical pricing in a regulated market.Review of
Economics and Statistics, 85(2), pp.298-306.
Kyle, M.K., (2007). Pharmaceutical price controls and entry strategies. The Review of Economics
and Statistics, 89(1), pp.88-99.