Indian pharmaceutical companies have asked the South African government to follow a liberal approach with regard to pharmaceutical exports to that country so as to give a boost the bilateral trade and joint ventures. Talks are already on between the players of both sides for closer ties.
Indian companies having operations in South Africa pointed that they were bogged down by several hurdles even as the country promised high potential of growth. Following a recent delegation by the industry to South Africa, talks were launched by more Indian companies to enter the African market, it is learnt.
``Registering pharmaceutical products in South Africa takes 24-36 months. The procedure is very cumbersome. Pharmaceutical companies have to adhere to standards and stipulations of South African MCC (Medicines Control Council) which are similar to British standards but much more stringent than US FDA. There is no single window clearance in South Africa,'' according an industry leader.
Imports of pharmaceuticals mainly bulk drugs from India are to the tune of US $110 million and exports to India are miniscule. There are several major companies exporting generic pharmaceutical products to South Africa. Most of them have set up their offices in South Africa. Many companies including Ranbaxy, Wockhardt, Cipla, DRL etc, have entered into joint ventures with South African companies.
According to a recent paper by FICCI, pharmaceutical companies have to sell at SEP (Sales Exit Price) similar to MRP (Market Retail Price) followed in India. However, some pharma companies in South Africa sell at lower than the fixed price through various means such as giving cash bonus to the distributors. Foreign companies do not indulge and such practices and hence their sales are affected.
A number of Indian industrialists attended launched talks with South African companies following the India, Brazil and South Africa (IBSA) summit, held during the visit of Prime Minister Dr Manmohan Singh in Johannesburg.
"Besides huge opportunities for promoting exports of Indian pharmaceutical products to South Africa, there is vast scope for collaboration and joint ventures and joint marketing across a range of drugs and pharma segments such as clinical trials and Contract Research in Manufacturing (CRAMS)," said a leading pharma company chairman who attended the meet.
South Africa has the largest pharmaceutical market in Africa, and it is the most regulated market unlike other major pharmaceutical markets like Nigeria, Kenya etc. South African market are very established and stable and turnover to investments is quite high.
The South African market is expected to grow at a rate of 4 per cent per annum. The most serious, and certainly the most high profile healthcare concern in South Africa is the HIV/AIDS epidemic and India is viewed the pharmacy for the third world by providing generic drugs for AIDS.
South African companies are also keen on investing in India, as setting up plant is said to be 40 per cent cheaper compared to developed countries and cost of bulk drug production is 60 per cent -70 per cent less compared to western nations.