The Bengaluru-based Srushti Pharmaceuticals Pvt. Ltd, a niche player in the small and medium enterprises space which is engaged in the  manufacture of sustained release formulations of pellets filled in capsules is charting out a  healthy growth path  with its entry into CIS. Despite the new measures from the Russian Federation’s regulatory agencies and the increase in its  product registration fees, the CIS market  at large offers huge  opportunities that cannot be ignored, says Jatish N Seth, director, Srushti Pharmaceuticals, president, Karnataka Drugs & Pharmaceutical Manufacturers Association (KDPMA) and vice chairman, Confederation of Indian Pharmaceutical Industry  in an interaction with Nandita Vijay. Excerpts

How would you describe the scene for Indian pharma in the CIS region?
The market in the CIS region for the Indian pharma is quite encouraging as in some of the countries the pharmaceuticals and active pharmaceutical ingredients (APIs) from India are widely accepted and the access is based on registration of documents especially in countries like Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova and Russia. The market is growing as healthcare as a social welfare is introduced by the government in some of these countries. The need to have a strong alliance with a local company is imperative as language is one of the hurdles to be overcome.

What according to you are the visible trends here in terms of ethical drug promotion and OTC drugs?
The trend for both the ethical promotion and over-the-counter drugs is encouraging as the demarcation is clear on this aspect. But this is possible only with an alliance with a local partner who will promote the products accordingly.

Do you think government of India has made the right moves to increase market access into the region?
The government of India through Pharmexcil is regularly participating in exhibitions and sending delegations for buyer seller meets. Besides this,  they have also been inviting the potential buyers to India. Indian pharma sees this as the right move because it is seen to be yielding the desired results, though a bit slow. A focus on this region would help to garner better presence. The government has also mandated to facilitate the creation of an enabling environment and infrastructure for accelerated growth of exports. This would enable pharma companies to embark on market specific strategies to help retain presence and market share in the region. Further, it would help companies in the medium and small sector to move up the value chain and open new vistas both in terms of market opportunities and new product launches in the CIS.

The government had also indicated that there were already several players keen to set up pharma production plants in Russia? As the president of KDPMA what are your comments on this?
This is the trend in almost all markets as countries are encouraging local production especially in the small and medium enterprises sector with incentives and in the long run it is more beneficial to manufacture in the region though it is an uphill task as imports are being discouraged viz-a-viz local production. Therefore, Indian companies too, have the capability to set base in many of these emerging markets like Brazil, Russia, Africa and South East Asian countries.

What are the challenges you see in the region that Indian companies need to encounter  even after making a mark in the region?
The usual challenges of registration of products, licensing, the gestation period are seen to be challenges that impact Indian pharma companies. Now after entering the CIS, companies need to put up with the rising expenses as marketing is a costly affair in these countries.

In September 2010, Russian Federation  introduced new laws like the fresh pricing norms for new drugs, detailed submission of all registrations and need to carry out clinical trials on Russian patients. Please comment?
The fresh pricing norms for new drugs is clearly to encourage local manufacturing and the pricing norms for registration are a trade barrier. It needs to be taken up by the authorities or probably at World Trade Organization (WTO) by the government

The detailed submission of all registration would see Indian pharma having to wait for 210 days for final clearances .The Russian Federation also mandates that the international pharma manufacturers will now need to carry out clinical trials on Russian patients because it requires maintaining the records of the drugs bio equivalence. All that can be stated is that our own clinical research organizations (ROs) are under a cloud of doubt and the permissions granted to conduct clinical trials are slow .The mandate of the Russian Federation to conduct clinical trials on Russian patients needs to be studied as it is based on their requirement

Do you see more companies heading to CIS?
It is a strategy to explore and enter newer markets as the access to these markets is possible and the growth possibilities and returns are high. Therefore it is not possible to ignore any opportunity.

You have already made an entry into Belarus and Uzbekistan, could you tell what are the reasons for the same?
We have made an alliance in Byelorussia, Belarus and Kazakhstan as our products have a good response in the market. Though the volumes are low , we expect it to grow in the coming year. However, what is seen is that the returns are reasonably good.

What are the products offered by Srushti Pharmaceuticals to the three countries and would you look at expanding presence here?
The products are for cardiac care, anti-ulcer and nutrition and depending upon the growth we see in a year we will expand our presence in the region.

What is your current strategy to tap the market and how do you intend to sustain your presence in the region?
We are focusing on advanced technology based products and a niche market presence. But the action plan is to ensure continued focus on these products and introduce new products every year.