Maharashtra,hailed as the pharma capital of the country, is home to around 500 drug making units which account for nearly 40 per cent of the country's total pharma produce. Except Ranbaxy, Dr Reddy's Laboratories and Cadila Healthcare, all others in the top 10 list of India's pharma majors have chosen it as the operational hub. Besides Cipla, Sun, Lupin and Wockhardt, almost all MNCs like GSK, Pfizer, Aventis, Abbott, Novartis, Fulford, Solvay and Merck made Maharashtra as the centre of activity.
There are a number of factors that give pharmaceutical industry in Maharashtra an edge over pharma industry in its neighbouring states. Factors such as good infrastructure, strong base of raw material suppliers and good talent pool with strong support from research institutions and easy access for international market and traditional investments continues to be a much sought after destination for pharma and its allied players from across the globe despite the increasing competition from the neighbouring northern and southern states like Gujarat, Andhra Pradesh and Delhi. More over, active pharmaceutical suppliers are centred on this region.
These are the primary reasons these companies set up research and development centre in Maharashtra. The Maharashtra based pharma companies also have created a strong brand image in the international market.
With the new opportunities thrown open by the patent regime, the Maharashtra-based companies are spreading their business operations by setting up subsidiaries, joint ventures and business tie-ups in the global arena
With around 50 of the total 75 big companies headquartered here, Mumbai still retains its status as the pharma hub of the country. All these top players – Glenmark Pharmaceuticals, Sun Pharmaceuticals, Wockhardt, Lupin, Cipla, and Piramal Healthcare - are based in Mumbai, the financial capital of India, which is also the capital of Maharashtra.
Even at this point of recession, Mumbai continues to be the commercial centre of India generating about five per cent of the country’s gross domestic product and accounting for approximately 25 per cent of industrial output. Also, Mumbai is the second populous city in the world with around 13 million inhabitants. This makes Mumbai, especially Maharashtra attractive for domestic and foreign healthcare providers and drug manufacturers to roll out their operations.
Having the corporate headquarters in Mumbai helps in convenient access to markets, customers and vendors spread across the country as well as internationally.
Of late Mumbai is also emerging as a preferred destination for pharma multinationals to set up their captive centres in India. A captive set-up is a wholly owned subsidiary of the parent organisation. These captive set-ups can be in any domain namely research and development, services, business process outsourcing etc.
The current economic slowdown hasn’t affected the pharma industry in India, especially Maharashtra much. If further steps are taken to boost the supply of low cost generics to the developed countries in times of recession, it will definitely boost the performance of most of the top pharma players in Maharashtra, who have a proven record in developing and supplying low cost generics, opine experts.
In the meanwhile according to a Pharmabiz study, the Maharashtra - based companies are also forging ahead with a focus on highly regulated market and emerging markets. Huge investments in research and development and world class cGMP facilities leveraging on CRAMS income, in-licensing, partnerships, acquisitions & mergers, thrust on biotechnology as well as clinical trials have played an important role in their growth.
Almost all the MNCs have established their presence in the state and new MNCs are likely to enter in Maharashtra with partnership in R&D or marketing. Out of 13 MNCs in India, nine MNCs have established strong presence in Maharashtra. The pharmaceutical companies in the state are also offering better returns to their investors in the form of dividend or better market realisation on the stock markets.
According to the Pharmabiz study, the 50 listed pharmaceutical companies, with net sales over Rs 35 crore, have recorded net sales growth of 22.2 per cent during the year ended March 2009 compared to the previous year. Higher exports to regulated markets, enhanced approvals in the US and Europe, higher income through CRAMS and setting up of new subsidiaries in international market helped to improve their operations despite several odds. These companies have successfully overcome major problems like stiff competition in generics, stringent approval systems in highly regulated markets and volatile exchange rates.
With several products going off-patent in next couple of years, the Maharashtra - based pharmaceutical companies are focusing more and more on R&D activities and filing new ANDAs as well as DMFs in the US, Japan, Europe and emerging markets. The cost- effective new products are helping these companies. They are working on innovation and new product development for global markets. With the help of R&D centres, they are undertaking projects in innovative research and technology for new chemical entities or new molecules and novel drug delivery systems.
Despite risk of uncertainty regarding results and considerable longer time for final outcome, the R&D expenditure of 10 leading Maharashtra based companies increased by 10.4 per cent during 2008-09 from the previous year.These companies have also filed several ANDAs and DMFS with US FDA with several approvals.
With a significant improvement in stock market indices, several pharma companies have reached at their yearly highest level recently and offering good returns to investors.
Though historically Maharashtra had been the pharma hub of India, it is now facing stiff competition from Andhra Pradesh, Delhi and Gujarat. Gujarat particularly has been very proactive in reaching out to industry and encouraging new investments by truly laying out the red carpet. Morever Gujarat has also been in the forefront of developing its infrastructure.
Unless the government of Maharashtra initiates more proactive steps to grow its pharma industry and preserve its identity as the pharma hub of India, other states may overtake the pharmaceutical industry in the state in the near future feel some of the pharma experts.
The states like Gujarat, Andhra Pradesh and Delhi are garnering new investments in the area of pharma and its allied segments with their carefully drafted industrial friendly and proactive policies, they point out
It is a fact that the pharma talent pool and the traditional investments still remain in Maharashtra. However this should not make the state complacent and thus losing its advantages. It is essential that that the state builds its healthy industry base by being more robust in its encouragement to industry, they opine.