Even as the US $19 billion Indian pharma industry with its proven chemistry skills and quality service offerings in manufacturing, marketing and R&D is scaling new peaks in the global arena, Gujarat, pharma hub of the nation, which has completed its centenary celebrations last year, is growing from strength to strength setting new standards in excellence.
The pharma industry in the state currently contributes to around 42 per cent of the total domestic pharma production and more than 22 per cent of the total pharma exports from the country. The pharma companies in the state comprise 789 licensed manufacturing units working on their in-house products and 1501 loan licensees. Almost 12 to 15 top players in the national level hail from the state, which also has one of the most active regulatory systems.
The state, which was badly hit due to the exodus of manufacturing units and business opportunities to the North Indian excise free zones, has now regained its lost glory with the support from the state and central governments.
The emergence of excise - free zones in North India had brought down Gujarat's importance in the Indian pharma industry in the years 2006 and 2007. During this period, the state's contribution had crashed to 28 per cent of the total pharma production, as many of the companies moved their manufacturing operations to the tax havens like Himachal Pradesh. However with the reduction of excise duty from 16 per cent to four per cent in 2008 and the industry - friendly policies of the state government, the Gujarat pharma industry is now back on its success path, according to industry leaders.
"When it comes to Indian pharma sector, Gujarat has become a brand name for the industry both in domestic and overseas markets. Gujaratis are reputed for their business acumen. While top companies in Gujarat have operations in various parts of the world, several multi national firms have set up their operations in the state," says Kamlesh Patel, chairman, Gujarat State Board of Indian Drug Manufacturers Association (IDMA-GSB).
"Gujarat is obviously well established as a pharma centre in India. With the scale of operations we have here, I am sure we will be able to hold on to the higher marks we have set in the domestic and international markets," opines I A Modi, chairman, Cadila Pharmaceuticals Ltd, one of the pioneers of pharma industry in the state.
With enormous manufacturing capacity and adequate infrastructure facilities, the state is expecting a huge growth in contract manufacturing and research services (CRAMS) business. Almost 20 per cent players in the state are engaged in contract manufacturing and services business, and nearly 60 to 75 companies are highly active in the segment with promising growth in the past years, informs Patel. The GSB is conducting seminars and exhibitions to support the small scale pharma industry on outsourcing and export activities.
The biotherapeutics industry is also gaining momentum in the state, with many of the pharma majors announcing their big time plans to set up more facilities for R&D and manufacturing of biosimilars and vaccines.
The number of pharma and healthcare related biotech firms increased from 24 in 2004-05 to 53 in 2008, according to the Status Paper 2008-09 published by the GSBTM in January 2009. At present, there are around 116 companies active in state biotechnology segment including pharma and healthcare biotech, agriculture biotech and industrial biotech. The biotherapeutic industry in the state is estimated at a turnover of around Rs 450-500 crore. The government is extending enormous support for the development of infrastructure facility, manpower and has created a corpus fund to support the biotech industry.
The current projects of the top players augur well for the pharma and biotech sectors. The government has also given a push to the ongoing activities by bringing in investments in the biotech and pharmaceutical sectors to the tune of Rs 2,508 crore and Rs 3,250 crore respectively through the Vibrant Gujarat 2009. The five exclusive special economic zones (SEZs) for pharmaceutical business set up by individual pharma companies and a Biotech Park developed under GSBTM, which are in various stages of development, will also give a boost for the pharma industry in the state.
Moreover the state has a rich ecosystem for the growth of Contract Research Organisations (CROs) too. At present there are around 15 major CROs in the state. Various institutions in the state are now conducting courses to bring in more skilled manpower into the sector, to support the fast growing clinical trial industry.
The state regulatory authority, a pioneer in conceiving and implementing effective regulatory measures, is one step ahead in modernisation programmes. Perhaps, the Gujarat Food and Drug Control Administration (FDCA) may be the first state regulatory office to issue sales licences and certificates through online. The e-governance project, which is in the final stage of implementation, will help the authority to issue the product licences and additional product approvals through online within a short period, informs H G Koshia, Commissioner, FDCA.
Parallel to the growth of the industry, the educational sector is also experiencing an explosive growth. The state currently has around 75 pharma colleges, which churns out around 4300 graduates and about 400 post graduates per year. The very fact that the number of pharmacy colleges has increased from around seven a decade back to 75 is a pointer to the fast growing pharma education in Gujarat.
The state is also one of the two major hubs of pharmaceutical machineries industry. The majority of the machinery manufacturing and servicing companies are situated in two states, Gujarat and Maharashtra.These two states being the two major pharma hubs together contributing almost 80 per cent of the total pharmaceutical production in the country, has eventually become the favourite spot for the machinery manufacturers too. Of these, Gujarat accounts for the production of around 35 to 40 per cent of India's pharma machinery, according to a study by the international business consultant KPMG in 2008.
Many of these companies in Gujarat are now keenly looking out to market their products in overseas countries including the regulated markets of US and Europe. The competent quality of products and services coupled with the low cost is benefiting companies like Cadmach Machinery Company Pvt Ltd in exports markets, comments industry sources.