The Indian pharmaceutical sector is one of the most promising sectors in the country as it accounts for nearly 2.4 per cent of the global pharma market in terms of value and 10 per cent in terms of volume. India manufactures over 60,000 generic brands across 60 therapeutic categories, at a cost which is 60 per cent lower than that of the US and almost half of that of Europe, which has catapulted it into a global pharma hub.
Home to globally known generic companies like Cipla, Zydus Cadila, Sun Pharma, Lupin, Abbott,Torrent Pharma, Dr Reddy’s, Aurobindo, the sector has grown at a compound annual growth rate (CAGR) of 13 per cent over 10-year period. Latest government reports suggest that the sector is further expected to grow at a CAGR of 22 per cent to reach US$55 billion by 2020 from 2015.
Gujarat , a strong player
As an established manufacturing base for bulk drugs and formulations, Gujarat has played a major role in etching India in the global map.
Through acquisitions of foreign assets and export-led business models, Gujarat has been pivotal in industries turnover and India's pharma exports. The state contributes to 33 per cent of India’s pharma sector turnover and 28 per cent of pharma export especially through its well established pharma clusters centered in Ahmedabad, Vadodara, Ankleshwar and Vapi.
Apart from providing a hassle free business environment through its policies and an investor friendly regime, the drug regulatory mechanism has also played a major role in getting global attention.
As in August 2016, Gujarat has total 3415 licensed drug-manufacturing units. Gujarat Food and Drug Control Administration (FDCA), informs that currently it has 2339 allopathic manufacturing units, 679 ayurvedic, 389 cosmetic units and eight homoeopathic manufacturing units.
It is home to 537 WHO compliant manufacturing units, 255 granted to manufacturers, of which158 are for formulations and 97 for bulk drugs. The remaining 282 is granted to
loanee firms.
“Gujarat government has been very supportive of the industries demand time and again which is quite evident from the fact that we are one of the key players in the country. But, one of our biggest strengths have been the aggressive drug regulatory system modeled to meet highest standards. It is imperative to say that lack of bureaucratic red tape, due to enhanced and path breaking e-governance initiative undertaken by the Gujarat FDCA has had a huge impact on the morale of the industry. Quick and single window services for all the administrative and regulatory work are the primary factors attracting and retaining investors from across India and globe to Gujarat,” stressed Viranchi Shah, vice chairman of the Indian Drugs Manufacturer's Association (IDMA)- Gujarat State Board.
The market leader
India accounts for 20 per cent of global exports in generics, in fact it is the largest provider of generic medicines globally, having brought in investment worth US$ 13.5 billion through FDI during January 2000 to December 2015 i.e five per cent of total FDI.
It is expected that by 2020, India will be sixth largest market globally. Interestingly, considerable amount of foreign direct investment has found its way to Gujarat in the field of pharma.
According to Gujarat FDCA, pharma exports from Gujarat has increased from US $ 562 million in 2006 to US$ 3060 million in 2015, which is approximately a 445 per cent rise. The state has 51 US FDA certified manufacturing units both in formulations and APIs; 23 MHRA certified units; 24 TGA certified units and 16 PICS certified units.
The ADC facility at Ahmedabad airport and infrastructure at ICDs in various parts of the state have also acted as great boosters to export-import business and for safe and quick cargo movement.
Dr H G Koshia commissioner of Gujarat FDCA pointed out that the reason behind Gujarat's success as a preferred destination is having a well-developed industry friendly ecosystem with strong building blocks that have helped the industry grow at such a phenomenal pace.
Strong regulatory frame-work
When it comes regulatory compliance, Gujarat leads the way as a major trendsetter to upgrade and update its regulatory requirement by aligning it with the latest technological advancement. This has led the state licensing authority (SLA) to be recognized as a key players in the countries e-governance initiatives.
“It is highly satisfying to know that all our efforts to excel in efficiency in the drug control administration so as to strengthen the industry is well appreciated globally. We work as a team and build partnerships with all our stakeholders to have a meaningful and positive impact on public health. This is evident from our work as we continuously improve upon both what we do and how we do it,” stressed Dr Koshia.
From creating industry stalwarts to attracting global investors into the state, pharma sector has seen exponential growth in Gujarat under its strong regulatory frame-work.
The ambitious e-governance initiative undertaken by the Gujarat FDCA has got accolades and recognition worldwide for bringing transparency, traceability, simplicity, effectiveness, speed, accuracy and accountability in various government to governments (G2G), government to citizens (G2C) and government to businesses (G2B) functions of the department.
For instance, the Gujarat FDCA’s Xtended Licensing & Laboratory Node (XLN) software covers varied functions related to issuance of licenses, enforcement, laboratory management, availability of medicines, and monitoring of availability of blood and its components with the blood banks.
Our administration's role in facilitating the pharma licensing and required clearances with a positive and supportive approach are considered as one our biggest strengths, pointed out Viranchi Shah.
Strengthening efforts
To meet the growing demands and strengthen the existing regulatory framework, FDCA is planning to set up seven new district offices across the state. These offices will be built in the seven districts that have been formed post the re-organisation of the state, for better administrative process, bringing the total number of districts in the state to 33.
It is understood that to ensure good governance and effective monitoring and implementation of the Drugs and Cosmetics (D&C) Act in these districts, the state drug regulator had made a strong representation to the state government last year itself requesting allotment of funds for setting up new drug regulatory offices in these places. Currently, all the administrative and regulatory functions of these districts are carried out through the district offices they were part of.
The seven new offices will be established in Aravalli which was split from Sabarkantha; Botad created from parts of Ahmedabad and Bhavanagar districts; Chhota Udaipur split from Vadodara district; Devbhoomi Dwarka split from Jamnagar; Mahisagar created from parts of Kheda and Panchmahal; Morbi created from parts of Rajkot, Surendranagar and Jamnagar districts and Gir Somnath split from Junagadh.
Dr Koshia informed that the state government has always been supportive to the state drug regulatory office by earmarking funds for the same. He informed that apart from creating new offices in these areas, they have also plans to invest in expansion and capacity building measure of the existing facilities as per the latest requirements.
Most importantly, he stressed that serious consideration is also given to create new food and drug testing laboratories in the state so that the state is well equipped to handle increasing work load without compromising on quality by over-stressing their resources.
At present there are four testing laboratories in the state, two dedicated food testing laboratories in Rajkot and Bhuj respectively and two state of the art food and drug testing laboratories at Baroda and Siddhapur in the northern part of Gujarat, for the dual purpose of testing food and drug samples from across the state
Future hub of medical devices
Identified as one of the most promising sectors, Gujarat has left no stones unturned to fully leverage the best of its potentials. D L Pandya, chief executive officer of Medical Plastics Data Service points out that the industry is currently going through a transitional phase, to keep up with the changing market dynamics.
The medical device sector in Gujarat is turning from being a low cost, low volume-low in technology sector to a high cost, high tech- critical care product sector. According to Gujarat FDCA, there are currently 253 new medical device manufacturers in the state who are licensed under CLAA scheme.
It ranks first amongst other states to have maximum number of manufacturing units in the country followed by Haryana, Maharashtra and Uttar Pradesh. In fact, NIPER Gandhi Nagar is the first NIPER in the country to be recognized as the Centre of Excellence (CoE) for the research and development of the medical devices. Pandya stressed that from the industries perspective this is a very important development as it brings much needed focus on the importance of R&D in the field of medical device.
He further informed that the state government is also planning to set up its first medical device park in the state. The decision for which he hopefully thinks would be announced before the commencement of Vibrant Gujarat Summit which is going to kick start from January.
“The state government has been so far very supportive of the industries needs, by pro actively addressing the issues. We hope that they will keep on helping us in our endeavors to ensure that like pharma we can also etch a medical device success story in the state and again put Gujarat in the global map,”Pandya says.
Sharing pharma sector's view on R&D in medical devices, Viranchi Shah further added that it is great news for the industry, especially since it would open up a far more affordable option for pharma companies by giving a chance to go for indigenously developed medical devices than imported ones.
Allied industries
Ever since the country’s first pharma company Alembic started its operations way back in 1907 in Gujarat, the state has produced many trusted and well-accepted pharma companies for the world. To support its pharma sector, Gujarat also has a well-established allied industry in the form of a deeply ingrained machinery and engineering sector, large number of Contract Research Organizations (CROs) etc. Interestingly, it is home to 40 per cent of CRO’s in the country.
There are currently total 34600 sales units in Gujarat out of which 16234 are pharmacies, 14779 are wholesalers and 3587 serve both categories.
The large pool of educational institutes and institutions like PERD centre, Niper Gandhi Nagar, management institutes like IIMA, training institutes like SPIPA Gandhi Labour Institute are also contributing factors to this.
ASU woes
Ayurveda, though an indigenous sector still remains to be tapped for its full potential by the government. While Gujarat is recognized globally for its capabilities and pharma centric approach, ASU sector feels neglected by the government.
Gujarat Ayurvedic Aushadh Manufacturer's Association (GAAMA), informs that though there are currently 679 manufacturing units in the state that belong to different companies from the ASU sector, hardly any steps have been taken by the centre or the state to address the demands of the industry. The only reprieve is Gujarat government’s decision to allow a pavilion for the Ayurveda industry in the VG 2016.
Experts stress that absence of government initiatives coupled with an anti-industry approach taken by the government agencies to be major factors impacting the growth of the industry.
According to Prabodh Shah, president, GAAMA, “Government needs to enact more pro- active policies for the industry, that should be strong enough to clear the doubts so that the industry is not affected due to the wrong interpretation of the law. This will enhance and sustain the development process of the SMEs.”