Right from procurement of license for methanol for industrial purpose to manufacturing patented drugs for multi national companies, the pharmaceutical manufacturers in India have come a long way. From just a few US FDA approved facilities, the number has risen to more than 70 units at present. The industry has seen and is undergoing many changes with respect to schedule-M requirements, current good manufacturing practices, good laboratory practices and other regulatory requirements, irrespective of the cost involved. There is an increase in regulatory approvals, as more and more companies are going for compliance approvals from various international regulatory agencies like US FDA, European Directorate for the Quality of Medicines & HealthCare (EDQM), Medicines Control Council of South-Africa (MCC), Medicines and Healthcare Product Regulatory Agency (MHRA-UK) and Therapeutic Goods Administration (TGA-Australia).
The bulk drug manufacturing has experienced a healthy growth in the last couple of years. The average growth is estimated at 10 per cent by the industry. Given the trend, the manufacturing segment is changing towards contract manufacturing. The companies are also entering into co-marketing and technology transfer agreements with overseas companies. For example, the Australian drug development company Alchemia Limited has entered into a marketing agreement with Dr Reddy's Laboratories Limited. As per the agreement, Dr Reddy's will market Alchemia's synthetic heparin (fondaparinux sodium). The Australian firm also transferred manufacturing rights from Dow Pharmaceuticals Inc under license to Dr Reddy's Laboratories. In another development, the Hyderabad-based API and finished dosage formulation manufacture, Hetero Drugs signed a joint venture with Russian company Makiz Pharma to jointly produce low cost anti retrovirals (ARVs) for HIV/ AIDS in Russia. Under the agreement Hetero will provide technology to manufactures ARVs.
Not only big but medium scale companies are also trying their best to attract investors through participating in various international workshops and seminars. The companies abroad already know about the capabilities of Indian pharma industry and in recent periods the contacts have become closer.
Though the contract manufacturing is expected to give fillip to the industry, the maximum retail price (MRP) based excise duty regime is hampering the growth of small and medium scale manufactures in few states. Though Value Added Tax (VAT) has been implemented, giving relief to bulk drug manufactures in terms of setting off the raw material cost, the 3 per cent CST still exists. Duty reduction is a case in point here. The industry is of the opinion that a reduction of excise duty to 8 per cent from the present 16 per cent would definitely bring change in the industry and would stimulate growth.
Given the current situation, there is uni-polar growth in the country as far as pharmaceutical manufacturing is concerned. Certain states, irrespective of the short supply of manpower, are enjoying the industrial boom, thanks to migration to these states. Though the government hails the position of Indian pharmaceutical industry on global front, in real terms, it does very little for the growth of the industry, according to experts.
"There are certainly backward pockets in Andhra Pradesh, Orissa, Bihar and other states. The government should give tax relief to specific backward pockets in each state instead of declaring any state as backward. Such an action would facilitate the progress of the specific backward areas. There are examples of certain backward pockets becoming popular among industrialist and hub of industrial activity," said M Narayan Reddy, president, Bulk Drug Manufactures Association (India) - BDMA.
The concentration of large number of manufacturing and formulation units in excise free states is not advisable with respect to industrial security. Alternative, equal and viable opportunities should be made available in the other parts of the country for the growth of small and medium drug manufacturing and formulation units, feels the organisation of pharmaceutical manufactures, a body of CIPI, representing small scale formulation units.
In addition to this, setting-up of US FDA compliant plants should be encouraged by providing tax holidays. So that Indian companies can exploit the opportunities arising out of drugs going off patent in coming years, according to a report by Federation of Indian Chamber of Commerce and Industries.