What New Zealand could gain from India's booming pharmaceutical sector

RNZ News

25-05-2025

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Dr Chinthaparthi Prabhakar Reddy remembers the sleepless nights of March 2020.
The World Health Organisation had just declared Covid-19 to be a pandemic, and the confirmed number of cases was steadily rising into the thousands.
He would often wake up in a cold sweat, anxious about how life might unravel before his eyes.
As the virus was spreading fast, one thing became imminently clear - the race for a vaccine had begun, and it was time for him to raise his hand to the challenge.
A clinical pharmacologist and professor at Nizam's Institute of Medical Sciences in Hyderabad, Reddy volunteered to become a principal investigator for the phase three clinical trials for Covaxin - India's first indigenous Covid-19 vaccine.
It was an inactivated virus vaccine or, in other words, a "killed" version of the virus that could trigger an immune response within patients without causing infection.
Conducting the trials for such an important vaccine was a mammoth task, but when Reddy describes the process, it sounds almost simple.
"We just needed to take the virus, grow it, kill it with chemicals, then package and administer it," he says.
"This method has a well-documented safety history, so we were confident the side-effects would be minimal. Almost all vaccines today follow this process."
Covaxin was India's first indigenous vaccine against Covid-19.
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Confidence in the science, however, didn't make the process any less grueling.
Reddy and his peers faced an unprecedented challenge with Covid-19.
Where the average vaccine development timeline can take anywhere from 10-15 years, Reddy had just 10-15 months.
"Developing a fast-tracked vaccine at record speed was the challenge … any drug or vaccine development typically costs US$3 billion to US$4 billion and can take around a decade because of the sheer manpower involved.
Dr Chinthaparthi Prabhakar Reddy
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RNZ / Jogai Bhatt
"Pre-clinical trials on cells and animals can take up to six years, while clinical trials, which unfold in three phases and involve human participants, can take up to two years for each phase.
"The first phase of clinical trials tests the safety of the vaccine on a small group of volunteers, which expands into larger and larger groups. By phase three, we see thousands of participants injected.
"Only after these trials are over can manufacturers apply for approval, and that process itself can take up to six months.
"In a pandemic, we didn't have that kind of timeline. Twelve years became 12 months. We were scared every day."
Covaxin's phase one trials began in July 2020 and lasted just 96 days before moving into phase two.
Reddy says emergency approval for the vaccine was granted in just two days, before the phase three stage was even complete.
"Regulators, manufacturers, researchers, everyone was working day and night. So, years became months, months became days. It really was that fast."
Manufacturers had begun producing Covaxin long before it was officially approved - which meant by the time regulators gave it the green light, there was already plenty of stock to distribute around the country.
"Covaxin got approved very quickly, and it had high efficacy rates," Reddy says. "But each day was tense… By the time we reached phase three, there were around 26,000 participants across nearly 20 centres throughout India. Everyone worked incredibly hard for this."
Reddy, now in his 70s, says he was exposed to somewhere between 100 to 200 trial subjects throughout the phase three stage of vaccine development. His own health was at risk every day, but he developed a personal litmus test to ensure he would be okay.
"I used to walk six floors every day, up and down at the institute where we did the trials. If I could reach the top without breathlessness, I knew I was safe. If I got breathless, it was time to get admitted.
"But all jokes aside, it was a very scary time for everyone. In the end, we were happy because Covaxin was safe, and it nearly saved our country, and we were also able to export it to around 25 countries."
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Although New Zealand ultimately relied on Pfizer for its vaccine rollout, Indian-made vaccines such as Covaxin played a crucial role in the global fight against Covid-19, even benefitting some of New Zealand's Pacific neighbours, including Fiji and the Solomon Islands.
The Covaxin journey is a testament to India's prowess when it comes to vaccine development and distribution, with Hyderabad being considered the vaccine capital of the world.
In recent years, it has also emerged as a global leader in generic medicines, supplying one-fifth of the world's medication by volume.
As New Zealand restarted free trade negotiations with the South Asian nation, is it time to re-examine the potential for pharmaceutical trade?
According to the Ministry of Foreign Affairs and Trade, pharmaceuticals are currently one of New Zealand's biggest imports from India, contributing a value of $131 million in 2024.
The South Asian nation is currently New Zealand's sixth-highest medication provider overall, offering affordable, high-quality alternatives to brand-name drugs for the country's prescription market.
By 2030, its pharmaceutical sector is expected to reach US$130 billion.
Dr Shubhadeep Sinha
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RNZ / Jogai Bhatt
It's a figure that doesn't surprise Dr Shubhadeep Sinha, senior vice president and medical director at Hetero Labs in Hyderabad.
Sinha says India has cemented its position as the global leader in generic drugs.
"It's the generic drugs capital of the world for a reason," he says.
"We know that diseases don't differentiate, whether treatment is coming from an innovator company or a generic manufacturer. And neither do patients.
"They need the products for their health, so when you have an equally good-quality product, available at a significant fraction of the cost, which is also accepted by the regulatory guidelines and laws, why not?
"The need for generics is strong everywhere, and the kind of manufacturing volumes that we can do in India is significant."
Generic drugs have been found to be just as safe and effective as brand-name ones and cost significantly less. However, New Zealand has stricter regulations on importing them.
Before entering the New Zealand market, generics must be deemed bioequivalent to the original drug - meaning they need the same active ingredients, dosage form, strength and absorption rate - verified through rigorous Medsafe testing.
A free trade agreement between the two nations would remove significant barriers to importing generics into New Zealand.
According to MFAT, customs procedures would be simplified, tariffs on goods would be removed and there would be fewer unjustified restrictions on what can and can't be traded.
Sinha says Hetero Lab's products could be beneficial to New Zealand's health system.
His company currently manufactures generics for a range of Indian pharmaceutical companies, including Cipla, Lupin, Pfizer India and Dr Reddy's - the latter two of which already supply generic drugs to New Zealand's prescription market.
Additionally, Hetero Lab's founder, B Partha Saradhi Reddy, was one of the original co-founders of Dr Reddy's itself.
"He was instrumental in developing their manufacturing and research capabilities. So essentially the mind of Dr Reddy's had come and started Hetero, and a lot of companies have come out of that."
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Sinha says generic drugs are often unfairly maligned for being a mere copy - but there's a lot of effort that goes into developing them.
"There's a lot of science behind the development of generic products, a lot of effort goes into synthesizing a compound, and a lot of high-quality development as well as manufacturing, which is a huge effort.
"India's mastered that, and because we're able to massively provide high-quality products, the costs have come down significantly. Generics already come at a low cost, and with high volume production it's further gone down, so it helps everybody."
Sinha questions what's stopping New Zealand from accepting generic drugs from India more freely.
"Healthcare costs are rising everywhere, nobody has a tray of money to spend every time," he says. "Even with strong healthcare in New Zealand, the need for generics is there."
High cholesterol, diabetes and heart disease are particularly prevalent conditions in New Zealand.
Sinha claims Hetero Labs is a global leader in these areas and would happily supply generic drugs to New Zealand.
"We do the largest of [cardiovascular and cholesterol medications] … we have all the antihypotensive drugs, that's the drugs that lower blood pressure, all the major classes for heart failure and anti-diabetic drugs.
"We also manufacture anti-cancer drugs, not just chemical compounds but biologics. We're now one of the largest biological manufacturers in the world."
Sinha believes a free trade agreement between New Zealand and India would be a game-changer.
"New Zealand might currently rely on China for generics but even China is now depending on us," he says.
"We have our own manufacturing facility in China, Russia, Egypt, the US. ... We're producing medicines worldwide, not only in India.
"An FTA would definitely help [strengthen that relationship] with New Zealand, of course it will."
* Jogai Bhatt travelled to India with support from the Asia New Zealand Foundation.