Pharmabiz
 

Bold govt policy to promote pharma sector in AP

P N V Nair, HyderabadThursday, July 31, 2003, 08:00 Hrs  [IST]

By 2020, a large part of India's pharmaceutical business activity, including manufacturing of bulk drugs, intermediates, formulations and R&D, will be located in Andhra Pradesh. The state will be the preferred destination for investments in pharmaceuticals for Indian as well as foreign multinational companies. It will also be a centre for pharmaceutical healthcare education and research and will be known for innovation in these areas. The basic objectives of the state government's policy relating to the drugs and pharmaceutical sector was enumerated in the Vision 2020 and the Pharmaceutical Policy announced by the government in 2002. The progressive and pro-active leadership of Chief Minister Chandrababu Naidu has given a distinctly definite direction to the industry. Andhra Pradesh already has a dominant position in the pharmaceutical industry with 33 % share of bulk drugs produced in the country. In value terms the industry is worth $ 1.6 billion and the state will leverage its strong position to emerge as the next global hub of pharmaceuticals with a share of around $ 8-10 billion by 2010 and $15-20 billion by 2020. The state exports over $ 500 million of pharma products. It has over 2,500 pharma companies and is home to two of the top 5 Indian pharma companies -- Dr Reddy's Laboratories and Aurobindo Pharmaceuticals Ltd. Some of the other major pharmaceutical and contract research and manufacturing units are Divi's Lab, Natco Laboratories, Hetero Drugs Ltd, Matrix Laboratories, Biological E Ltd, Suven Pharmaceuticals Ltd, Global Bulk Drugs& Fine Chemicals Ltd, Krebs Biochemicals Ltd, Neuland Laboratories Ltd, SMS Pharmaceuticals Ltd, Virchow Labs Ltd, Sri Krishna Pharmaceuticals Ltd, Sreepathi Pharmaceuticals, Anu's Laboratories Ltd and the GVK Group. AP has some distinct advantages for attracting investments in the pharma sector. The state has an established pharmaceutical base starting with IDPL and a strong R&D base with reputed institutions like Indian Institute of Chemical Technology (IICT), The Centre for Cellular and Molecular Biology (CCMB), Centre for DNA Fingerprinting & Diagnostics (CDFD) and National Institute of Nutrition (NIN). It also has a strong academic base with 22 pharma degree colleges and 18 diploma colleges turning out about 2000 candidates annually. According to the Chief Minister, "Until now our thrust in the pharmaceutical industry was on reverse engineering, but in the post-WTO regime, we need to change gears to innovation and discovery." Realising the growth potential of the industry, he had constituted a Task Force on the Pharma Industry, headed by himself. The government has decided to create a 'Discovery City' in Hyderabad with various centres of excellence concerning the pharmaceutical industry as part of it. The government has also planned to start an International Institute of Life Sciences and another Institute of Intellectual Property Rights. The government has introduced a new industrial policy that provides infrastructure at the doorstep. Simplification of labour laws and Single Window Clearances were some of the measures taken to attract more investments in the sector. In order to facilitate the industry, the government provides Escort Officers for major projects. The State Investment Promotion Board regularly reviews the progress in giving clearances for matters pertaining to the industry. After setting up the Biotech Park and the ICICI Knowledge Park near Hyderabad, the government is in the process of creating a Pharma City at Parwada near Visakhapatnam under public/private partnership. The Pharma City will have world-class infrastructure on an area covering 1900 acres, with state-of-the-art environmental protection measures. This will facilitate the local industry to expand its manufacturing facilities. It will also provide opportunities for global MNCs to set up joint ventures or locate their own manufacturing units. The government will also set up two formulations parks, one close to Hyderabad and the other an EPZ, possibly close to the bulk drugs estate. The EPZ will be connected to the Vizag airport/seaport by a highway and share the Pharma City air travel infrastructure. Since the state has a high potential for clinical research and trial, the government has approached the Centre for initiating necessary legal measures in tune with international requirements to build a strong base for clinical research. The networking of corporate hospitals will also go a long way in this direction. It is envisaged to bring the activities of all the pharma industry associations under one roof for building up the image of the industry in the global arena. Hyderabad is already providing all the facilities, including an International Convention Centre, world-class exhibition facilities and other amenities at Hitex, near the Hitec City, to make it a suitable venue for international pharmaceutical conventions and trade fairs. The present facilities inaugurated recently are to be expanded and improved further. The growth of the pharmaceutical industry requires the establishment of a special export promotion council (Pharmexcil) in view of the importance of the pharmaceutical sector in earning foreign exchange for the industry. So far the interests of the industry were looked after by Chemexcil, based in Mumbai. The state government and BDMA (Bulk Drugs Manufacturers' Association) were trying to get permission to locate Pharmexcil in Hyderabad. However, the Union Government had cleared the setting up of Pharmexcil with its headquarters in Mumbai and the registered office in Hyderabad. Well, most of the government's sops and incentives still remain on paper. Chronicle Pharmabiz tried to get the latest status report on the various measures announced by the government. A Questionnaire was first sent to the Hyderabad office of Ernst &Young, which is the consultant/advisor to the state government on the pharma/biotech sectors. The questions were termed as 'too hot' and they politely regretted replying to them. Then a request was made to B P Acharya, Industries Secretary, who is also in charge of the pharma/biotech sectors, for an interview. The Secretary forwarded the request letter to Ernst &Young, who again regretted any action on the matter. Pharmabiz then sent a fresh set of questions to the Chief Minister's office which found the questions as 'hottest' and did not respond in the matter in spite of several reminders on phone. The industry is also fragmented. There is not a single organisation covering the interests of all the players in the industry. BDMA represents the bulk industry in the country and not of AP alone. Some are members of the BDMA, while others are with IDMA. The Organisation of Pharmaceutical Manufacturers (OPM) represents the formulations makers, mainly the SMEs (small and medium entrepreneurs). There is also the Indian Pharmaceutical Association (IPA). Most of the large units in the bulk drug and formulations segments are not active members of any organisation. Since there are different organisations and also many are not members of any organisation, it is difficult to assess the yearly production, annual turnover, exports, domestic consumption etc. in real terms. There is also under-cutting of prices by the manufacturers because of stiff competition and the absence of a single association. According to industry sources, the progress of the much-publicised Biotech Park is not that encouraging. The park authorities claim that more than 60 % of the plots in the first phase have been either sold or booked. But there is hardly any activity. No major Indian or foreign companies have taken space there. Unless the area around the Park is developed as a township with residential complexes, schools, hospitals and markets, it is difficult to attract even the workforce.

 
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