As the Katoch Committee report on APIs is awaiting Union Cabinet approval, Manoj C Palrecha, managing director, Lake Chemicals and joint secretary, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) in an interaction with Nandita Vijay says the initiative is long overdue but the implementation and execution should not take such a long time. The industry is looking for time-bound efforts, he points out. Excerpts:

What would be the impact of the Katoch Committee report on the Indian API industry?
The Katoch Committee on Active Pharmaceuticals Ingredients (APIs), constituted by the Department of Pharmaceuticals (DoP), has made sweeping recommendations for revival of API manufacturing in India including tax free status to cluster developers and cluster participants for 15 years. The initiative is long overdue but the implementation and execution should not take a long time. The industry is looking for time-bound efforts. As it stands, the action is missing and we are unsure of how the government will take this forward. With 2015 being declared as the Year for APIs, we are now in 2016 and wonder how many companies were aware of this.

Do you think that Katoch Committee report will enable India to control its imports from China ?
While the report is impressive and interesting, we should learn from China about their manufacturing prowess in intermediates and API along with the backward integration efforts. Our government is reacting late as China is now seen to face a serious decline in growth. Now the government needs to speed up implementation of Katoch report and reduce dependence on imports from China.

Another point is that the Indian API sector is also of the view that it has lost an opportunity to capitalize on China’s economic slowdown and at a time when pharma plants in the dragon land are facing issues of poor regulatory compliance with shut down orders. Even if the Katoch Committee report on API which is impressive and interesting, it has come in late after China has fleeced Indian drug importers with highly priced bulk drugs and intermediates like vitamins particularly folic acid, pain management drugs, antibiotics and antipyretics. The government did not utilize the opportunity to give a thrust to the Indian API industry all these years and has reacted late. At least now the government should work towards its speedy implementation.

What are the key issues affecting the API industry in the country?
The API micro small and medium enterprises (MSMEs) continue to reel under a fund crunch to expand operations. This is primarily because of the government policies that only encouraged import of APIs and intermediates from China. We were unable to go for backward integration because of our laws and pollution control norms in the country. There is a serious lack of coordination between the ministry of commerce and the ministry of environment & forest with regard to pollution control norms. The Katoch Committee report fails to address these issues. The stark reality is that large API units with a turnover of Rs.3,000 crore do not find it difficult to invest around Rs.3 crore for pollution control systems for zero discharge and water treatment. But in the case of MSMEs, the situation is tough to even sustain production operations.

Further, the government went on make it compulsory to install online monitoring equipment for environmental pollution. This equipment is priced between Rs.15 lakh and Rs.18 lakh. The industry was forced to install these monitoring systems which are imported from Germany. Our government did not even consider a tech-transfer to ensure it was available at a lower cost despite India’s capability to manufacture the same.

At least, the government could have provided an import subsidy to purchase this equipment which is indispensable and critical to monitor pollution levels at production plants. All this happens in India at a time when the global plants have already adopted green and clean environment solutions.

Although the online monitoring equipment is a one-time investment, it is expensive.

Now with the government stating that the Katoch Committee report is in the circulation with the Cabinet Committee, the industry views that their comments are not considered. What is your opinion on this?
It is high time that the pharma enterprises  is treated on par with the biotechnology, information technology and science & technology  sector because it is also a knowledge-based industry. In the case of labour laws, we see the Karnataka government has exempted information technology companies from this legislation. Now in the pharma sector, Karnataka accounts for  264 drug manufacturing units providing 20,000 direct employment. Since the pharma  industry is also  engaged in an expertise that is equated with information technology and  biotechnology,  it needs to be relieved from complying with working hours regulations as stipulated in the Karnataka Industrial Employment Rules, 1946.  
 
Could you give us a snap shot of Lake Chemicals in the API space ?
Lake Chemicals, is a dedicated API major. The company which was set up in 1992 is known for its APIs in the anti-psychiatry and ophthalmic space. Our products are exported to more than 40 countries in five continents and also bagged the Star Export house recognition given by the Government of India. Our facilities in Bengaluru at Attibelle are EU-GMP and WHO cGMP certified. We are a leading manufacturer of Benzodiazepine and is already an approved source for global pharma majors including the originators for a few of the products .In 2009, we initiated the process of applying for the Certification of suitability of European Pharmacopoeia monograph (CEPs) to EDQM. We have already been awarded  CEPs  for Alprazolam, Clonazepam, Bromazepam,  Loperamide and Lorazepam.

The company is also in process of expecting some more CEP approvals from EDQM. These efforts will ensure our foray into the regulated markets are further strengthened. Another development at the company is that its facilities underwent an audit by Mexican regulatory agency COFEPRIS which comes under the Ministry of Mexico. For its entry to the US, it is in dialogue with customers there and has filed the Drug Master Files (DMFs) for Alprazolam and Clonazepam. Our plant is approved and audited by innovators like Pfizer, Searle, Johnson & Johnson and Roche. Our Midazolam HCl quality complies with the Danish Pharmacopoeia and is approved by many customers including those from Europe. Many DMFs for products are registered in North America, Eastern Europe, Spain, New Zealand, South Africa, Russia etc. In addition, our facility is audited and approved by Ministry of Health in Iran.