Though tough, bifurcation of Andhra Pradesh has doubled the opportunity for both the states to boost their pharmaceutical industrial sector. While on the one hand Telangana has advantages of well established pharma sector, Andhra Pradesh has opportunities for expansions and new investments.
S.V. Krishna Prasad, MD & CEO of Cito Healthcare, in an interview with A Raju, shares his views on various development, regulatory and policy initiatives relating to pharma industry in AP, TS and the country in general.
Being a well know industrialist and entrepreneur in Andhra Pradesh and Telangana, could you please give us your views on the pharma sector in AP and TS after bifurcation?
Telangana has been an established pharmaceutical hub with multiple industrial estates developed in major districts of Hyderabad, Medak, Sangareddy, Zaheerabad, Ranga Reddy, Nalgonda districts. Unlike the anticipated shifting of pharma units away from TS, it is now turning out to be an opportunity for the existing units to expand into AP areas in addition to the sizeable presence existing there now but in lesser areas.
The ambitious and probably only one of its kind in this part of the world of a huge expanse of over 12000 acres earmarked by the TS government also is another expansion avenue for the pharma industry and also to locate themselves in the vicinity having more conducive atmosphere in the TS region.
Andhra Pradesh currently has Visakhapatnam as one of the major destinations for the pharma industry and in addition to the existing JNPC; another locality is being finalized to house a bigger pharma city as another pharma destination as JNPC has been full with units. Nakkapally village in Vijayanagaram district has a big plant near to Anakapally. In addition to this, Nellore is another upcoming area. A pharma cluster is on cards near here spread over 3500 acres.
AP is also locating most of the statutory and regulatory bodies in a common administrative complex proposed at the port city of Visakhapatnam.
Andhra Pradesh would be one of the future logistics centre with rail, road, air and sea connections and hence, would be a promising area for pharmaceuticals and research activities.
There have been lots of initiatives taken up by both the state as well as the central governments to boost the API industry and pharma sector as a whole. How do you feel these initiatives are taking shape.?
At the moment, the Foreign Direct Investment in the pharma sector among few others has been a big and positive step by the central government and both Andhra Pradesh and Telangana would be benefited by this measure.
In the case of AP, the government is proactive on facilitating the industry growth. The state currently has Visakhapatnam as one of the major destinations for the pharma industry and in addition to the existing JNPC; another locality is being finalized to house a bigger pharma city as the current outfit is nearly full with units. In addition to this, Nellore is another area upcoming as another pharma destination.
AP is also locating most of the statutory and regulatory bodies in a common administrative complex proposed at the port city of Visakhapatnam including Pharmexcil regional office, DCA, CDSCO, ADGFT catering to the exports, customs, and excise and export promotions.
Andhra Pradesh would be one of the future logistics centre with rail, road, air and sea connections and hence, would be a promising area for pharmaceuticals and research activities.
In the case of Telangana, the government could get the Mucherla Pharma city approved by the centre and currently the land acquisition is in progress and the efforts are on all fronts to pool the land through the efforts of TSIIC, officials, land owners and the rest of the stake holders
Could you dwell on the new cluster development projects in Vizag and Nellore in Andhra Pradesh, and the much hyped Pharma City in Hyderabad. How big are these projects and how would they change the face of the pharma research, manufacturing, exports and imports?
Irrespective of the states or the boundaries, industry would grow provided the administration aids and expedite the growth, remove delays and avoidable obstructions. In this case, both the state governments have to be proactive in all spheres. TS-IPASS is one such measure initiated by the TS government and AP also is coming forward to offer similar facilitations.
In this progressive atmosphere, the new cluster proposed in Vizag and Nellore needs to be planned in such a way that those who were involved in the past design and implementation needed to be consulted to have firsthand knowledge on how they were done and more than what to do, what is not to be done and needs to be understood and documented. The past experiences in the case of TS and Visakhapatnam ventures had mistakes mainly on the unit’s size, the ETPs design and locations etc.
In Telangana, with the Mucherla Pharma city in less than 20 km from the Shamshabad International Airport, that would be a key location for both personnel and air cargo movements.
Similarly, the proposed larger international airport at Bhogapuram in Visakhapatnam would make it logistically attractive to the pharma industry regulators, auditors, customers and the industry personnel movements.
With all these pro-active indicators, I see a phenomenal growth in the industry and its components of research, manufacturing, imports and exports, a better balance of payments position (as many of the pharma giants are from the Telugu states)
Please tell us about the global scenario of the pharma sector. How do you view the initiatives of our governments in attracting the investments and allowing 100 per cent FDI in pharmaceutical segment. How is this going to impact the domestic manufacturers and SMEs in India?
FDI would bring capital investments into the pharmaceutical sector which has some of the less concentrated ones such as biotech, medical devices, and alternative medical sources including pharmacognosy related segments. It is quite welcome. The fact that it would impact the domestic industry in the short term but in the long term, it would be on the basis of live and let live. But with one distinct difference is that you will survive only if you are quality and compliant both in mind and deed. If the US is importing event till this day more than 40 per cent of its generics requirement from India, it is the consistent quality that this land offers. However, we need to be tuned to the times and the data integrity and the documentation and process adherence have to be more stringently implemented. Those small and medium enterprises, which have come up in standards of quality, compliance and timeline adherence, the cost effectiveness would be like a bonus to the customers both domestic and international.
Could you also give your perspective on changing regulatory reforms in various countries and its impact on Indian exports. Also certain countries like China, Japan, and Russia are stringent in their regulations and not allowing our products to their markets but at the same time dumping cheap quality products in India? What needs to be done in this regard?
On the regulatory front, India is catching up but the pace of adaptation is slower compared to other countries that are mentioned here. Certainly, it is a fact that China exports into India easily but when it comes to importing into it, more stringent and complicated procedures are thrust up on our exporters. We need to ensure that domestic producers would have to stop sourcing materials from them (as out of make or buy, buying is turning out to be cheaper) and for that, we need to bring back a stricter anti-dumping duty regime vis-a-vis China, Russia and Japan.
I guess most of these challenges are because of our large exports or manufacturing is still focusing on generics which now is too crowded a place in the world market. It is time for us to go for INDs than ANDAs which would be earning better foreign exchange. But first we need to ensure that we have supporting measures aiding R&D activity by creating a conducive atmosphere. For reasons better known to the stakeholders that be, this has been found wanting in our industrial atmosphere whether it is government, bureaucracy, regulators, to a large extent and industry to some extent.
To overcome all these issues, I would advocate a national committee/ task force, first consisting of all the stake holders to make a road map for the pharmaceutical industry growth. The task force should recommend to the Cabinet through the industry ministry a periodical report applying PERT (performance evaluation review technique). This committee has to be above considerations of region, size, type of industry segment such as mfg, service, research, regulatory, statutory and so on. A quality compliance body would have to regulate the manufacturers, researchers including clinical research (as till date over 700 products are on hold by EU for unsubstantiated non-adherences by a single CRO site; which now later has been reported in few more sites). If the sites have deviated, please be sure to penalize them to correct or make them exit. But the data integrity, the process compliance duly evidenced in documentation would have to be ensured by all the stake-holders concerned. As quality is never only the quality controller/assurer's responsibility, but also of the manufacturers, vendors, service providers, compliance too needs to be a part of the processes. It is time India is audit-ready instead of preparing for it.