In order to give a booster shot to the production and improving the quality of active pharmaceutical ingredients (APIs) as well as for reducing the costly imports from China, the Union government is mulling to set up bulk drug parks in the country.
India being a leader in finished generics, prefers sourcing APIs from China because of its high volumes of production , it can offer APIs on lower costs. But the irony is that now Indian pharma companies are losing out to China because of lack of support from the Union government to manufacture APIs.
"In order to ensure robust growth and provide more scope for developing the sector, we are working to give further fillip to the API sector", said Minister for Chemicals and Fertilisers and Parliamentary Affairs Ananth Kumar.
The Ministry of Chemicals and Fertilizers has christened 2015 as the Year of API and the Government of India (GoI) is taking significant steps to foster this initiative. A task force known as the Katoch Committee has been constituted by the department of pharmaceuticals (DoP) to promote bulk drug manufacture. Six large API intermediate clusters in 5-6 states are being established to revive API manufacturing in the country.
Even in 2016 end, China was projected be the largest API market and beat the US which is the second largest global market. India will stay as the third largest mercantile market for generic APIs with a projected 7.2 per cent by 2016. Italy came down because of the crisis in the EU.
India imports around 80 per cent of the APIs . In 2016, the value of APIs that were purchased from China was valued to the tune of Rs. 13,853 crore. Much of it is APIs for antibiotics.
Bulk drug parks
Karnataka government is making efforts to set up a bulk drug park in Yadgir a northern district in the state. Similarly, Maharashtra is also exploring the concept of MIHAN (multi modal international cargo hub and airport at Nagpur ) to be developed as a pharma hub which will incentivise the local drug manufacturers thus giving the impetus to the ‘Make in India’ programme. In the same way Gujarat has also signed a slew pacts with potential and interested investors. In the same Gujarat too favoured a pharma hub as it accounts for nearly 40 per cent of the country’s medicine production and accounts for 28 per cent of the pharma exports. Andhra Pradesh is already the recognised bulk drug capital of the country.
According to pharma industry experts, a bulk drug park will have all the common manufacturing facilities and will reduce capital expenditure by offering affordable rentals and revenue support to ensure the production plants to be competitive. Further such projects will enable the companies with all the latest technological support required for research and development.
API capability of India
From a global perspective, the API capability of India cannot be ignored. We account for the highest number of USFDA plants pegged at 546 facilities and around 2,633-FDA approved drug products. In addition, it is also home to EMA approved and PMDA audited sites which enables the industry to take off and grab promising opportunities.
Although in India, volume of production is lower compared to China, the global recognition on quality and variety of API products create an opportunity to either partner with global players for marketing the APIs. The country could also garner its revenues from being preferred source for supply for global pharma bigwigs.
Asia Pacific ranks second due to the factors such as availability of low cost production facilities and affordable labour in the India and China. The cost difference ranges from 30 to 60 per cent if drugs are manufactured in China or India compared to other countries. Hence the two countries are expected to witness significant growth in the near future due to increasing production capacities and presence of a large number of domestic and international players. Thus Asia Pacific is the most competitive market for APIs. In fact the competition is expected to intensify between India and China as these are most attractive destinations for pharma manufacture.
Indian APIs are filling around 39 per cent of the global market. Most companies are strengthening their credibility in regulated markets by obtaining approval for their products, therapeutic applications and manufacturing facilities.
According to Manoj Palrecha, managing director, Lake Chemicals, India accounts for 50 per cent of the production of these substance which are formulated alongside the active ingredients by companies. The remaining 50 per cent are sourced from China and Europe.
Govt support
According to Katoch Committee for bulk drugs, most of the business has gone to China. Therefore India has to retrieve that business. India about two decades ago was the main pharmacy for bulk drugs. So the government is now making efforts to set up bulk drugs parks. Establishing bulk drug parks with all common infrastructure in place will give the industry ample support to take-off. The government is doing it, said Minister Kumar.
This support by the government will now see promising growth prospects to candidates. For instance, in the case of Pharmacy Training Institute, it is a platform for skill enhancement and achieve faster chances of getting placed in the pharma industry. Over 560 students from 32 batches have been placed in both in India and abroad. The syllabus for training has been revamped to suit the current requirements covering from production of API , formulations, to regulatory affairs or end-to-end supply chain, sales, human resources and finance, Uma Nandan Misra, dean, Pharmacy Training Institute (PTI), Bengaluru.
The demand for total continuous quality management systems, has led the need to add on application of microbiology in pharmaceutical testing, calibration of instruments, packing material analysis, drug recalls. It is also mandated to have a practical experience in an approved Drug Testing Laboratory to comprehend the nuances of analysis. Pharma industry is increasingly focusing on scientific marketing skills added Misra.
Action plan to reduce dependence
The Union Commerce Ministry is set to device an action plan to reduce dependence on China for import of APIs by Indian pharmaceutical firms.
As part of this, a preliminary meeting chaired by Sudhansu Pandey, Joint Secretary, Ministry of Commerce, sought suggestions and ideas to device a strategic planning from all the stakeholders of pharmaceutical industry, research institutes and bulk drug manufacturing association.
“A recent meeting held by Commerce Ministry was attended by Director, Indian Institute of Chemical Technology (IICT), chairman of Bulk Drugs Manufacturers Association (BDMA) and Pharmexcil to discuss on the issue of over-dependence on China for import of APIs. We have submitted our views about the pharma industry. The ministry has sought more information about Key Starting Materials (KSMs) and APIs being imported by the member companies from China and other countries,” informed Uday Bhaskar, Director General of Pharmexcil.
The global market
The global market for APIs is projected to grow at a CAGR of 6.5 per cent to a value of US$ 185.9 billion by 2020 The Asian contribution to the API industry is shared between India 33 per cent, China 61 per cent, others six per cent
Drastic manufacturing cuts implemented by the pharma giants to in-house API production, attributed by poor cost viability and increased productivity issues coupled with other key parameters such as high end R&D costs and pricing issues on finished formulations have resulted in a thrust to outsource API production. Moreover, the amplified growth in API segments projected is based on a substantial global upsurge in the demand for generic prescription drugs.