The Bulk Drug Manufacturers Association (BDMA), formed in 1991 with Hyderabad as its head quarters, is the representative voice of all the active pharmaceutical ingredient (API) manufacturers of India.The body has been serving as a catalyst between the government and the industry on issues pertaining the growth of the industry. BDMA is currently supporting the bulk drug companies in various aspects including environmental issues and guiding industry in GMP compliance.

M Narayana Reddy, senior vice president of BDMA, in a conversation with YV Phani Raj of Pharmabiz, dwelled deep on various issues concerning bulk drug companies and initiatives the association is taking up. Excerpts:

How do you see the future of bulk drug industry in India?

The Bulk Drug industry is the backbone of the Indian pharmaceutical industry, playing a significant role in improving the health standards of the people. It today consists of large, medium and many small-scale units providing direct employment to over 2,00,000 and indirect employment to over 2,00,000 people.

The capital investment in the industry is about Rs 5000 crore. About 90 per cent of the domestic bulk drugs requirement is met by the Indian industry itself. The bulk brug sector is growing by 20 per cent, annually, and this growth rate will be sustained for next 10 years.

The progress of the sector has not only rendered the country self-sufficient in national health care, but also has reversed the trend of Indian foreign trade profile from a predominantly importing country to a successful exporter.

With big bulk drug companies increasing their focus on R & D and innovation, and small and medium companies giving thrust on technology upgradation, Indian bulk drug sector will benefit the world by offering quality drugs at affordable prices.

Though major pharma companies are able to invest about eight per cent of their turnover into R&D, other companies which constitute the majority, spend less than five per cent on R&D. Low investments in R&D by small and medium companies are attributed to low net profits achieved.

The Prime Minister's Task Force on drug pricing has recently sought for recommendations from industry associations. How does BDMA comment on it?

Indian pharma companies have a challenge as DPCO expects the firms to produce drugs at a price lesser than the international prices. On the other hand, the companies are expected to maintain environment measures, which are more stringent. This disparity puts the Indian industry in a fix. The companies have to spend a lot of money in using technologies to satisfy the pollution control boards. But they cannot sell drugs at reasonably higher prices. This will affect the companies' new product development.

The drug prices in the country are actually kept low by the cut-throat competition among the companies, and not due to DPCO. Unfortunately, DPCO is becoming a hurdle to the industry. There has been absolutely no control on price of raw materials, which is a major concern.

Compliance of GMP is one issue that has been waking up small and medium enterprises time and again. Do you feel that SMEs should get some more time to comply with GMP?

All companies irrespective of their size should matter the quality of drugs as they are dealing with human life. There can be no compromise on quality for whatever reason it may be. The small and medium enterprises (SMEs) should produce drugs scientifically and strive for technology upgradation. Only GMP facilities should be in place. At the same time, the state governments should give companies more time for compliance, if required. Commitment of SMEs towards GMP compliance will ease the situation. Government should lend a helping hand. The industry needs advice and guidance, not a stick.

BDMA has been successful in getting land at concessional rate for its member companies at Jawaharlal Nehru Pharma City. When do you expect the member companies will actually start commercial production?

BDMA has been able to get 450 acres of land in the Jawaharlal Nehru Pharma City, at Parawada near Visakhapatnam, implemented by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and developed by Ramky Group, at subsidized rates. There are about forty member companies of the association who have been benefited by the initiative. Companies like Aurobindo, Matrix Labs and Hetero Drugs are setting up new units in the Pharma City. The commercial production at the site is expected during 2006-07. The bulk drug turnover of AP is likely to grow two-fold, post 2007.

Of late, bulk drug companies in Andhra Pradesh have stuck in a controversy regarding certain environmental clearances? Have you found out a suitable solution for this issue?

BDMA is actively addressing the problems relating to the environmental issues, by guiding the industry. The APPCB is also not rightly equipped with the knowledge. Thus BDMA, led by experts who have knowledge about the production, technology and pollution related aspects are acting as mediators to sort out this issue.

The bulk drug companies in Hyderabad are constantly following all measures to manage the industrial waste without affecting the environment.

The pollution control boards should realize that the companies are self-disciplined and self-regulated, and it was nothing but such commitment has made the Indian pharma industry win the unique distinction of having the largest number of USFDA approved facilities outside the US. The government, regulatory bodies and NGOs should all support the industry to strengthen further enabling to come out with block-buster drugs.

The Supreme Court of India has earlier banned expansion and green field projects of bulk drug companies in specific districts of AP. What has been the impact of the ban on the growth of bulk drug industry in the state?

The constraints imposed by the Supreme Court on starting green field projects impacted the industry very much. The ban was applicable to districts such as Hyderabad, Medak, Mahaboobnagar, Nalgonda and Ranga Reddy. Most affected are the small and medium scale manufacturers in the districts. Companies are forced to set up units in the areas where there is no abundant skilled manpower. In the absence of necessary infrastructure facilities, how can one expect to set up units elsewhere in the state.