Andhra Pradesh, which had played a stellar  role in the pharmaceutical firmament of India as  the bulk drugs hub of  the entire nation, is losing its salience because of a host  of problems dogging  the state.

 Lack of   infrastructure facilities like common effluent treatment plant, roads, training centres, clinics and drainage systems are stunting the growth of the bulk drugs industry  in the state despite the fact that out of the total 650 members of the Bulk Drug Manufacturers Association (BDMA), 300 are from the state and the  bulk drug industry in AP meets 80 per cent of the total requirements of all manufacturing companies in India.

The pharmaceutical industry in AP having equal importance in  both formulation companies and bulk drug manufacturing units, needs a permanent solution for the crucial problem of environmental hazards which is often raised as a weapon against the industry by environmental activists and pollution control board, say industry experts. Moreover  the political  maelstrom  in the state  is also playing havoc with   the overall  prospects  of the industry.

Despite the fact after  information technology, pharma industry is the leading revenue earner for the state, the government gives no protection for the industry from political agitations,bemoan  leaders  of the sector. All this had lead to some of the  bulk drug units  migrating  to excise free zones.  

Unless the government of Andhra Pradesh comes forward with a slew of proactive measures to support the growth of pharmaceutical industry, especially of the bulk drugs industry, it would  be difficult to cash in on  the opportunities that are unfolding in the wake of drugs going off-patent shortly, said K V Ranga Rao, executive director, Bulk Drug Manufacturers Association (BDMA).

According to  Rao,  the state government is doing precious little for supporting the pharma industry. They have not even filed an affidavit in the AP high court seeking lifting of the ban on expansion of existing units and on new establishments imposed by the Supreme Court in four districts.

In Andhra Pradesh, the pharma industry is facing Supreme Court ban in four districts such as Mehboob Nagar, Medak, Ranga Reddy and Nalgonda because of pollution problems.

According to him since the  industry units in the four banned districts have invested more than Rs.200 crore to upgrade their technologies, there is no more pollution worth mentioning. Most of them have reached zero discharge level of effluents. Despite the efforts on the part of the industry,  the response from the state government is  lukewarm.

Major players like Dr Reddy's Labs, Aurobindo Pharma, Hetero Drugs, Matrix Labs, Divis Labs, Natco Pharma, Neuland Labs are located within the area of the banned districts. Ranga Rao bemoaned that the state government is not giving any attention to the big industries. It is the duty of the government to inform the court that things have changed because of upgradation of technologies.

“Actually it is the handiwork of the state government and not that of the Supreme Court for the continuance of the ban on new establishments and on expansion of the existing ones. The government is afraid to remove the ban. It can file an affidavit in the court saying that things have changed. But it is not doing anything. We don’t need any financial help from the government, but we need their co-operation. After all, it is the duty of the government to safeguard the industry,” Rao said.

The state government has brought the IT industry under the purview of Essential Services Maintenance Act for giving protection during the times of riots, agitation and bandh. But they have not considered the pharma industry’s request to place their manufacturing activities under the ESMA Act despite they are manufacturing life saving drugs for the entire nation.

According to Rao, China is able to out-compete India because the Chinese industry gets financial and moral support from the government ,especially the SSI units. “Many states have pharma policies, but AP does not have one. The government does not consider pharma industry as a priority sector,” he added.

In India, the application and administration in respect of environmental laws are not uniform throughout the country. In certain states, the regulatory authorities are more stringent. But in China the situation is different. There is a uniform policy and procedures with regard to environmental pollution standards, Rao said. Another reason for the growth of the industry in China according to him is the cheap labour in that country besides more productivity.

According to the Organisation of Pharmaceutical Manufacturers of AP, since the government does not encourage the industry,most of the units are withering. Many companies from Andhra have migrated to HP, Uttaranchal and Sikkim lured by the  excise duty exemption offered by these states.

Tata Rao, the secretary of OPMA says that the political turmoil that has been continuing in the state for the last several years is impacting the industry. So the industry requires protection from agitations by political parties. There is no special security for pharma companies.  Government should thwart hooliganism from outside agencies, he said.  

People from API manufacturing units and from formulation manufacturing companies demand special protection for their establishments. According to them, if the government is ready to provide security to the companies, they are ready to meet 50 per cent of the expenses. Tata Rao said all the SSI formulation units in AP are manufacturing for the MNCs, but  the government has  no special preference for purchase from SSIs.

OPMA has requested the government to bring the formulation units under green category , but there is no positive responsive from government side, he added.

Regarding court ban, the manufacturers said the government should take the details of the development to the court and request for lifting the ban. In the banned areas, there are units of so many big and small players. They are unable to expand their units or to bring up new ones. “As of now the industry units in the four banned districts have invested more than Rs 200 crore to upgrade their technologies. So there is no more pollution worth mentioning. Most of them have reached zero discharge level of effluents” they argue.

While  many other states have special projects and policies for the development of pharma industry, Andhra Pradesh government lacks such a policy. While there are 20 pharma clusters in Gujarat, in AP only seven  clusters are functioning for name sake.

Piqued by the step motherly treatment meted out towards this sector, the industry cognoscenti said that while the government has brought the IT industry under the purview of Essential Services Maintenance Act for giving protection during riots, agitation and bandh, it has not considered the pharma industry’s request for special security.

Likewise the industry needs more facilities to survive. “There are no infrastructure facilities like common effluent treatment plant, roads, training centres, clinics and drainage systems for the smooth running of the pharma industry in our state. The government of this state is not doing anything for the development of small scale pharma units. Instead they are helping the MNCs. All the SSI units are struggling to survive”, said a member of the OPMA.

The cop out of  the government has not only stunted  the growth of the industry as a whole, but also   does not facilitate the industry to venture into overseas market. “Only very few SSI units are able to export because of no support from state government”, said the member.

However he lauded  the previous government for its effort in checking further migration of companies to  other excise free zones. Sources from the bulk drug manufacturers association said about  30 companies have migrated to excise free zones.  

The industry is facing problems such as pollution, shortage of water, power and coal. The political turmoil that has been continuing in the state for the last several years has hit the industry badly. The pharma industry is a risky industry, there is chance for chemical reaction.  If the production is affected it cannot be exported, the office-bearers of OPMA and BDMAI bewail.

In 1999 when the supreme court ban came, there was no sufficient infrastructure nor . effluent treatment plants near Hyderabad. Now two  ETPs are functioning, one at Patancheru in Medak district and another one at Jeetimetla in Rengareddy district. The companies spent Rs  23 crores for each plant.

For a solution to the problems, the industry insiders said that Government should constitute a joint committee comprising representatives from regulatory authority (Andhra Pradesh Pollution Control Board), industry, academy and research organisations, and the committee should be given terms of reference (ToR) to assess the efforts taken  by the industry in tackling environment problems during the last few years. Then only they will come to know the efforts taken by the industry in tackling the environmental issues and the agony it  industry had to undergo during these years, they added.