The Karnataka Pharmaceutical Policy (KPP), announced in March last year with much fanfare to provide the much needed boost to the sector, appears to have been put in cold storage as the govt moves at snail's pace to approve investments & offer incentives to the pharma companies.
The policy which was introduced to spur investments in the sector seems to be in a snail paced mode primarily because of the political climate which has led to a standstill of most policies and projects. There have been no signs of a Pharma Park where the equity contribution to the extent of 26 per cent is sought from the Karnataka State Industrial Infrastructure Development Corporation (KSIIDC), Karnataka Industrial Area Development Board (KIADB) and the Infrastructure Development Department (IDD) in public private partnership (PPP) mode.
The state was also scheduled to announce in its Budget 2013-14 and the 2014-15 about the efforts on the formation of the Karnataka Pharmaceutical Development Council (KPDC) with a budgetary provision of Rs. 1 crore and the Vision Group on Pharmaceuticals with a Rs. 25 lakh allocation which are two monitoring agencies.
It is gathered that the efforts to form a Vision Group on Pharmaceuticals is underway as the members of this committee have been finalised and is awaiting the nod from the Karnataka government.
Over the last one year, since the Karnataka Pharmaceutical Policy was unveiled, the pharma sector in the state is now grappling with the new Drug Price Control Order (DPCO 2013) which has brought down prices of specific medicines and this is seen to have created a dent in the revenue generation. On the export front too, trading in international arena is not easy going by the stringent regulations from global authorities and the weakness on the currency valuation front. “If the Karnataka Pharmaceutical Policy was implemented on time, the industry would have had some relief in terms of seeking required revenues to kick-start some of the manufacturing facility plans”, according to Jatish N Seth, president, Karnataka Drugs and Pharmaceutical Manufacturers Association members (KDPMA) and director Srushti Pharmaceuticals.
The incentives and concessions over and above the existing Industrial Policy (IP) was seen as a channel for growth, he added.
Even on the education and research front, even though the government planned to organize an event once in two years titled ‘Pharmacia’ to showcase the sector in Karnataka with a grant of up to 50 per cent of the cost subject to a maximum of Rs. 600 lakh, nothing seems to have been even discussed on this front.
As part of the Human Resources Development responsibility of the state and the pharma sector, Finishing Schools were to be set up with required labs and equipment to enhance the employment opportunities amongst fresh graduates to meet the demand at entry level. Now the pharmacy graduates too are groping for openings.
With the clinical trials industry receiving a serious blow following the Supreme Court decision in early 2013, the annual incentive of 20 per cent expenditure towards clinical trials for bio-availability and bio-equivalence studies with a maximum of Rs. 100 lakh per human study is also in cold storage.
Karnataka has 251 pharma companies with a turnover of Rs. 12,000 crore of which exports accounts for Rs. 6,000 crore. The state exchequer receives around Rs. 4500 crore from the pharma sector.