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"GCC should be on top of the agenda for Indian firms"
Gireesh Babu | Thursday, January 25, 2007, 08:00 Hrs  [IST]

Dr B R Shetty, founder of Abu Dhabi based conglomerate New Medical Centre (NMC), started his operations in the Arabhealthcare sector in 1973. The NMC Group currently runs several hospitals including NMC Hospital, Dubai and Sharjah, NationalHospital and New National Medical Centre, Abu Dhabi treating over one million patients a year. With a recent foray intopharmaceutical manufacturing, under the title Neopharma, thecompany is looking for new ventures on innovation technologies in the fields of nanotechnology, biotechnology, cell-therapyand tissue culture. In a recent e-mail interview with Gireesh Babu, he explained the opportunities ofIndian pharma industry in the Arab nations. Excerpts:

As a leading player in the GCC Healthcare market, how does NMC look at the potential of this region?
For a comprehensive healthcare provider like us, healthcare business in the GCC holds tremendous potential. A rising population, access to world-class healthcare, ready acceptance to new and emerging advances in healthcare and above all, a continuous firm commitment to healthcare by all countries in the GCC signal sound potential for healthcare in the region.

How supportive has been the government in facilitating the healthcare industry/ biotechnology? Could you mention a few instances of new policies and regulations in this respect?
The United Arab Emirates is developing special parks that are providing the right environment for local companies to set up facilities. For instance, Neopharma located at the Industrial City of Abu Dhabi. Here the Zones Corp has supported us with all the basic infrastructure and continues to support expansion programmes. We also understand they are exploring the possibilities of setting up a biotech park in the Industrial City of Abu Dhabi. The objective of this move is to foster research based biotech units in Abu Dhabi.

Do you think UAE is key to explore the GCC healthcare market? How?
Companies in the United Arab Emirates are already establishing their presence in other GCC countries. At NMC we have already started expanding our core business of hospital healthcare beyond the UAE by setting up state-of-the-art hospitals in other GCC countries such as the Sultanate of Oman. Our healthcare trading business already spawns the GCC.

It is important for companies to look at the GCC as one single entity rather than perceive this as a region of many countries. In this region, the UAE is one of the most advanced countries and is at the forefront of development and that includes healthcare too.

Indian firms are keen on GCC markets. What, according to you are the emerging possibilities for Indian healthcare/pharma players in this region?
The GCC region emerges as an important destination, keeping in view the market attractiveness for branded generics, next only to US and European markets

According to me, for Indian pharmaceutical companies, destination GCC should be on the top of the agenda. While the traditional route to establishing business in Middle East is to operate through the local distributors, there are other new emerging trends for Indian pharma companies to gain foothold in the GCC market. This includes tying up with local pharma manufacturing companies and thus being established as products of local manufacture.

Do you think linking up with GCC based pharma companies by Indian counterparts could be a beneficial proposition for both? How?
The technology strength of the Indian companies and the production, regulatory, market intelligence and distribution network of the local company can be unified for providing the much needed boost to establish business rapidly. This synergism serves as a win-win situation for both the aspiring overseas partner and the local company to leapfrog into the market and garner market shares quickly.
The other intangible benefits include the following:
.Indian companies will be in a position to leverage on the "local manufacturing label" with customers and regulators at large.
.Indian companies will be able to leverage on the GCC regulatory framework, and the mutual recognition system. This can potentially translate into simultaneous launch of new products and simplified regulatory approvals.

Very recently, Neopharma has announced a tie up with India based Biocon. What is the potential of biotherapeutics in GCC countries?
The objective of this joint venture is to capitalise on each other's strengths - Biocon's technical know-how and Neopharma's prowess to manufacture and market biopharmaceutical products in the GCC Region.

The potential would of course depend on the type of product mix. Biopharmaceuticals in the area of chronic therapy conditions such as diabetes, cardiovascular disorders etc hold good potential. Besides presence in oncology and rheumatoid arthritis are also important

For the patients here, it would mean quality lifesaving medicines manufactured right here in the heart of the Emirates. Further, manufacturing of critical products can help maintain stocks of life saving drugs locally and therefore minimize the chances of any import delays and higher prices.

How far the ongoing Dubai Biotechnology and Research Park (DuBiotech) project could help UAE to become self sufficient in the innovative discipline of biotechnology? What is the current status?
By establishing DuBiotech, the country's vision to capitalise on the emerging technology of the future is already on the anvil. While on one hand, the park will be a haven for companies in terms of being 100% tax-free, allowing 100% foreign ownership, and 100% repatriation of profits abroad, on the other, it will directly bring in world class research and manufacturing into the UAE and thus benefit the people here.

On the long run, the products manufacturing locally can help maintain stocks of life saving drugs locally and therefore cut down reliance on imports lower the chances of any import delays and higher prices.

Currently the infrastructure is moving into place and we should soon witness companies setting up facilities shortly.

Could you briefly explain how the divergent markets among the member countries impact healthcare industry in GCC region?
In my opinion, markets across the GCC are convergent. There are many common elements that run through all the countries. To begin with, healthcare is emerging as a leading sector for export and investment opportunities in the GCC. In all the countries, this demand is fuelled by two key parameters - Continuous improvement of public health standards and the need for advanced, hi-tech healthcare.

Further, if one were to look at the total healthcare expenditure as a percentage to GDP, it ranges between 3 to 4.5% across all the countries. Across the GCC countries, government hospitals cater to the local population and in some countries the expatriates too. However, the private sector has been receiving renewed attention with the introduction of a number of private healthcare institutions.

Presently what are the hassles faced by Indian companies while foraying into UAE/GCC region? How, do you think, they can overcome these challenges?
Somehow, the GCC region has never been considered as a top destination for Indian pharmaceutical companies. If earlier, international foray meant moving into the less regulated markets, today it is more towards the advanced markets such as the US, Europe and Japan. Surprisingly, during this transition, the GCC has not been a part of the agenda. There could be many reasons - regulatory hurdles, business volumes and an already strong presence of multinational companies.

The major challenges facing Indian firms will be:
a. Registration across all the countries.
b. Meeting regulatory requirements relevant to the GCC region.
c. Aligning closely to the markets and understand the right product mix for introduction.

For Indian companies the first challenge to be overcome is to view this region as GCC region and not as six different countries. Company registration can be done with the GCC and this would mean registration of the manufacturing facility across all the GCC countries in one stroke.

For this purpose, the facility has to have a US FDA or UK MHRA approval. Fortunately, today, India has the highest number of US FDA approved facilities outside the USA. These companies can trigger off a 'company approval' by GCC and then move ahead with the product registrations.

In addition, it is also necessary to understand and prepare for regulatory requirements peculiar to this region such as stability studies and BE studies.

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