A raft of measures adopted by the government recently has given a new lease of life to the pharma industry of Maharashtra which had witnessed a sluggish phase of growth during the last few years.
The state now provides special incentives and exemptions to encourage new units such as waiving electricity duty for 15 years, exemptions in stamp duty, refund of octroi in certain categories and Special Capital Incentives (SCI) to all SSI Units.
Tax and excise exemptions offered to industrially backward states like Himachal Pradesh, Uttarakhand, Jammu and Kashmir etc saw a large number of industries shifting their manufacturing facilities to those states in the recent past.
Despite the industrial movement out of Maharashtra, the spirit is fast reviving both in terms of manufacturing and supply of materials due to motivating factors like conducive industrial climate for setting up pharma units among others.
Higher exports, investments in R&D, focus on highly regulated markets and tie-ups with multinational pharma giants also helped the Maharashtra- based pharmaceutical companies to put up a good show during the fiscal year ended March 2013. Medical tourism and setting up of Ayush clusters are other welcome changes.
Lupin remained on top among the 50 companies with consolidated net sales of Rs 9,462 crore during 2012-13, followed by Cipla Rs 8,087 crore, Wockhardt Rs 5,609 crore, Glenmark Pharmaceutical Rs 5,012 crore and Piramal Enterprises Rs 3,496 crore. Ipca Laboratories, GSK, Strides Arcolab, Abbott India, Sanofi India, Elder Pharmaceuticals and Unichem Laboratories registered sales above Rs 1,000 core during 2012-13.
The state has also taken a leaf out of the experiences of some of the southern states like Andhra Pradesh and Tamil Nadu which have seen significant industrialisation with the incentives they have been offered.
Current scenario
As a globally recognized leading manufacturer of affordable quality generic pharmaceuticals, the state contributes about Rs 19,000 crores of about Rs 60,000 crores of the Indian pharma industry. The state today boasts of 171 units that are approved as per WHO – GMP guidelines and 10 units approved by the US FDA. The Central Drugs Standards Control Organization (CDSCO) also has set up their west zonal office in Mumbai with two drug testing laboratories.
According to the Indian Drug Manufacturers Association (IDMA), Maharashtra is home to 347 bulk drug units, about 693 formulation units and various other manufacturing units such as 17 large volume parenteral units, 9 vaccine units, 1931 loan licensees, and about 1200 ayurvedic and cosmetics units.
IDMA is a body of 750 members made up of large, medium and small national manufacturers from across the country. “We propose to have 1000 members this year and state boards across the country where there are pharma clusters in order to strengthen pharma industry in Maharashtra” Says Daara Patel, Secretary General, IDMA.
The intellectual capital the state has to offer will always make it a priority destination for setting up R&D centres especially for the pharmaceutical industry. The latest development in this direction is the setting up of a multidisciplinary regional centre for disease control at the Haffkine Institute for Training, Research & Testing (HITRT). Aimed at creating linkages with healthcare institutions for the eradication of infectious diseases, the draft proposal has been submitted to the state government recently.
"There is a need for such centres across the country as there are restricted number of laboratories conducting research, training and testing," informed Prof. Abhay Chowdhary, director, HITRT.
With tax/excise duty benefits in states like Himachal Pradesh, Uttarakhand, Jammu and Kashmir getting reduced, the industry feels that Maharashtra should also be proactive in setting up manufacturing plants in the state. Experts also advocate that state government must encourage more cluster-based projects by providing state-of-the-art common facilities. This will help the SME sector to share costs and enhance quality, productivity and innovative capabilities.
The second ayurveda industry cluster namely Maharashtra Ayurved Centre Pvt Ltd (MAC) under the Centre's Ayush scheme at Kolewadi of Pune district will be coming up shortly. The work on the first ayurveda cluster in the state known as Konkan Cluster at Sangmeshwar Taluka is almost complete and is scheduled to be operational any time now.
Scheduled to open by October 2013, Pune cluster will house an ayurvedic cafe for the development of ayurveda cuisine, a dedicated raw material processing centre for supply of standardized, graded, certified and processed raw materials in bulk to the ayurvedic manufacturers.
"The cluster has given us an opportunity to develop a 360 degree horizontal model to propagate concepts and principles of ayurveda to the farmers, traders, doctors, researchers, pharmacists and other stakeholders through interventions like exhibition, new drug and process design for mass production, contract manufacturing, raw material processing and sale, quality control lab and entrepreneurship development centre," explains Dr Sunita Belgamwar, chairperson of MAC.
The influx of outsourced work from global pharma companies has also given the impetus for the creation of Pharma Special Economic Zones (PSEZs), such as the one coming up in Nanded which would be one of the key drivers of outsourced pharma services growth in the future. Creation of more such zones will help to spur growth and enable companies to benefit from them.
Investment in medical tourism
Maharashtra has witnessed an investment of well over Rs 15,000 crore in the health sector over the past one decade. Medical tourism is growing at an annual growth rate of 30 per cent and a large number of people from India and abroad visit the state for treatment.
To develop a comprehensive strategy for promoting medical tourism in the state, chief minister Prithviraj Chavan has recently set up a high-level committee headed by additional chief secretary (medical education) Anand Kulkarni. Asian Heart Institute director Ramakant Panda, Ruby Hall Clinic, Pune trustee P K Grant, JJ hospital dean T P Lahane and medical education director Praveen Shingare are on the panel of the committee.
Safeguarding healthcare
As a step forward to safeguard the healthcare interest of the patients in the state, state health ministry has recently launched a unique haemovigilance programme to track and monitor the quality of blood and blood products supplied to the patients, right from the point of collection to the transfusion stage.
Through this initiative, which is a first in the country adopted by any state for checking the quality of the blood , the government aims to bring in and adopt a strong monitoring mechanism that will ensure availability of high quality blood and blood products to the patients. Government is running this programme through the Maharashtra State Blood Transfusion Council (MSBTC) starting with Mumbai and its satellite cities on a pilot basis.
Incentivizing growth
Southern states of Andhra Pradesh and Tamil Nadu have seen significant industrialisation over the years, as far as the pharma sector is concerned. Maharashtra has also learnt that all capacity expansions have actually happened in these states or within SEZs.
"Maharashtra, no doubt, is also doing a lot but it needs to move at a much faster pace. Despite some industrial movement out of Maharashtra, the state still provides a very conducive industrial and financial climate", says an industry analyst.
Mumbai is and will always remain the capital of pharma industry. Mumbai and nearby TTC industrial areas at Navi Mumbai, Tarapur MIDC, Pune with various MIDC areas, Nashik and Aurangabad are said to be the quadrilateral for pharma industry.
This quadrilateral offers best trained technical manpower backed with strong presence of pharmacy educational & research institutions including Bombay College of Pharmacy, KMK College of Pharmacy, Bharati Vidyapeeth College of Pharmacy and colleges at Pune, Nashik and Mumbai totally accounting for about 56 degree colleges and 105 diploma colleges.
Prospects for R&D
Strong presence of medical colleges and pharmacy colleges provide an environment for clinical research, formulation and new drugs development. Government must provide all necessary tax sops to attract more investment in this area, opine experts.
MAC Pune will be launching two certificate courses of one year duration of which one would be on raw material identification, grading and standardisation and the other on ayurveda production techniques respectively approved by Maharashtra University of Health Sciences (MUHS) from July 2014 onwards to bridge the gap between industry and education sector.
Challenges and solutions
However there are still a few areas hindering the development of pharmaceutical industry in the state.
Maharashtra is known for its highly pro-labour laws like the sales promotion employees (Conditions of Service) Act. The act was amended to cover medical representatives and to classify them as 'Workers'. However labour unions in the state often make life particularly of small and medium scale industries very difficult.
Moreover, minimum wages in Maharashtra are raised frequently by the government without considering the economic difficulties of the industries.
Time-consuming and bureaucratic procedures without adequate facilities is another major stumbling block. Too many inspections which are expensive for industry in terms of time and money can be curtailed and rationalized considerably.
Infrastructure and traffic problems are also acute and progress very slow , forcing people to shift to other states.
“License for new formulations are difficult in Maharashtra as compared to some other states. Maharashtra FDA should strengthen its technical wing and make judicious decisions instead of making manufacturers to go to Delhi and other states,” explains Shah.
Small scale units are the backbone of many industries, especially pharma industry. Due to stringent provisions of the revised Schedule M, many small scale units had to down shutters due to their inability to conform to these norms. Government must provide financial and technical support to revive these units.
Industry experts suggest that the state government should take more pro-active steps to further the growth of pharma industry by providing more incentives, tax sops and investment in talent creation so as to ensure that the bulk of Indian pharma activity remain within the state.