Goa's annual production of pharmaceuticals is around Rs 2,800 crore and about 1/10th of India's pharmaceutical production comes from Goa. Goa also accounts for nearly Rs 550 crore worth of exports. Goa has around 403 units including loan-licensed units, with about 295 registered pharmaceutical producers in the state. Of this, 108 are independent units. In the ISM sector, it has only nine manufacturers.
Leading local and transnational pharma players like Blue Cross Labs, Knoll Pharma, E-Merck India, Colorcon Asia, Geno Pharma, Procter and Gamble India Ltd, Cadila Health care, Glenmark, Ratio Pharm India Ltd, Ranbaxy, Cipla, Indoco Remedies Ltd, Vicco Labs, Lupin, Unichem, Wyeth, Sander Pharma, sanofi-aventis, Zandu Pharma, FDC Ltd, Kare Pharma have operations in the state and many more are planning to start either manufacturing or R&D units here. ratiopharm India Pvt. Ltd, the Indian subsidiary of ratiopharm International GmbH, Germany, has set up a pharmaceutical development center at Verna in Goa. Pliva opened up its research center, Pliva Research (India) Private Ltd., in Goa. The Goa centre will be focused on conducting bioequivalence, bioavailability and pharmacokinetic studies for the company's generics product pipeline and will complement Pliva's existing R&D capabilities established in the areas of chemistry, biotechnology and formulation development, already operating in Croatia, Poland and the Czech Republic. Goa has thus attracted the attention of not only Indian but also western pharmaceutical majors for setting up their units. Some of the attractions for these Indian and western companies are discussed in this article.
Industry friendly environs
The Government of Goa offers a five year income tax holiday for industrial concerns. Besides this the state government is also making several policies to attract pharmaceutical industry units into Goa. Making the use of tax sops and incentives, many Indian as well as multinational firms have set up manufacturing bases in Goa.
The Goa Industrial Development Corporation has so far established 22 industrial estates in Goa, Daman and Diu, namely, Corlim, Margao, Sancoale, Daman, Mapusa, Tivim, Bichotim, Kakoda, Honda, Bethora, Canacona, Kundaim, Diu, Tuem, Verna, Cuncotim, Pilerne, Marcaim, Pissurtem, Colvale, Shiroda and Sanguem.
Goa allows an employment subsidy to support sustainable employment of local youth. The concept lays stress on generation of employment and not on capital deployed. Subsidy is applicable to employees of all SSI units and in specified categories of medium and large-scale units for a period of up to 5 years.
To encourage certification and patenting, the Government of Goa offers a subsidy programme: Certification / Patenting Incentive scheme. Under this, a subsidy of maximum Rs 2 lakh will be available for units, which obtain Certification/Accreditation by ISI and ISO or any other International Certification and /or patent right on products and/or processes.
As per the Goan industrial policy the following thrust areas have been identified for development
. Pharmaceuticals, drugs and biotech industries
. Food processing and Agro based industries
. IT and IT-enabled services
. Eco tourism/Heritage tou-rism/ Adventure tourism/ Event tourism/Medical tourism
. Entertainment industry
Focusing on pharmaceuticals, drugs and biotech industries, the Goan government has the following action plans in terms of providing
. Pharma park
. Food park including wine park
. Software Technology Park
. Agro economic zone
. Biotech park
. Special economic zone
SWOT analysis
A quick SWOT analysis of what Goa has to offer for the growth of the pharmaceutical industry gives us the following insights.
Strengths
. Favorable business environment: Goa's New Industrial Policy (August 2003) and Biotech policy 2006, give top priority to pharmaceuticals, drugs and bio- tech industries, several fiscal incentives have been announced.
. Developed infrastructure: Transport, power, and water availability comfortable.
. Existence of auxiliary industries, such as packaging units to support the packaging requirements for the pharmaceutical and biotech products.
Weakness
. Outsourcing of raw materials and extreme dependence on supplies.
. With large firms/Group of Companies/MNCs being in the majority - these do not require much assistance; small industries (which are fewer) are left to fend for themselves. No collective approach/ bargaining to redress problems.
nAbsence of common facility testing labs, R&D labs within the state.
nWeak capital base forbidding small units to invest further fearing poor viability.
nLack of exposure to enter export market.
Opportunity
. Increasing demand, both domestic and overseas
. Scope for expansion and additional units for generic drugs
. Proximity with Mumbai for raw materials, export and testing facilities
. Globalization
. Peaceful Social Climate with communal harmony
Threats
. Schedule 'M' involves additional cost, threat perceptions on viability and commercial feasibility so smaller firms may shy away from it.
. Cut-throat competition, both domestic and external.
. Ceiling on product prices.
. Documentation and procedural hurdles in export marketing.
Goa has always been a centre of attraction for people and the industry. With the new policies and schemes operated by the government, Goa is likely to attract a large number of both big and small pharma companies, which would set up their units in Goa. With its coastal line and rich marine life, the state will be an attractive zone for marine biotechnology and the biotech park planned is sure to focus on the same.
(The author is program manager, Healthcare Practice, Frost & Sullivan) (For feedback/ enquiries contact sthomas@frost.com)