There is a huge demand for Indian pharma companies in the Commonwealth of Independent States (CIS) and they need to improve the marketing muscle, perseverance and the ability to negotiate, said a section of officials from export departments of pharma companies.
The key impediments to export to CIS are distance, language barriers, inadequate transit facilities, inadequacy of data on business opportunities and lack of direct and regular interaction among the business entities.
In CIS certification process is stringent, as they expect drugs to be of international standards. If companies can prove their mettle, this is the region they can exploit. Hence, many large and medium sized pharma companies have established their presence in these countries, noted, Rakesh Bamzai, president, Biocon Limited.
The CIS comprises of Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Republic of Moldova, Russian Federation and Ukraine. However, Russia in particular is luring investments from Indian pharmaceutical and biotech companies for setting up facilities. For instance, Shreya Lifesciences has set up Shreya Corporation in Moscow. In general pharma companies still view CIS as a tough and challenging market, according to Shailesh Siroya, Bal Pharma.
However, Indian companies face the biggest deterrent in the form of product tests. Even products that are certified are made to undergo further tests in the region. It is time consuming and expensive. CIS has been lenient with European pharmaceutical companies but had been making pharma companies from the Asian and Eastern European origin to undergo product tests in each region separately to obtain marketing rights for their products, said Bamzai.
According to K Subramanyam, a pharma consultant, CIS region is creating Free Trade Agreements (FTAs) but exporters are upset over omission of Focus Market Scheme, which results in high freight cost, prevention of duty credit facility at 2.5 per cent of the free-on-board value of exports.
As per VR Kannan, pharma consultant, all CIS are landlocked and far away from the world's trading hubs. The region is evolving as a high-risk yet high returns destination with intense competition from local manufacturers. "These are important investment markets, where setting up of joint ventures could prove extremely rewarding. Companies will need to have a strategy in place to derive maximum benefits. The pharma exporters should adopt medium and long term goals rather than a short term one, he added.
From Karnataka, Micro Labs has established its presence in the region since 1990 through a full -fledged office in the Russian Federation. Strides Arcolab is the other player in Russian market. Bal Pharma is present in the region through agents, while Medreich Sterilab is in a dialogue with some companies. In short, most of the companies in the state are moving heaven and earth to register their products in the region.
Micro labs exports branded generic versions of different antibiotics, gastroenterology, cardiology, anti-diabetics, central nervous system (CNS) and pain management to CIS. The company's exports to CIS accounts for around 20 per cent of total export sales.
Strides Arcolab is on the look out for supply and development agreements with companies in the region. Currently, the company has presence in the region with its nutritional products, food supplements, antibacterial, NSAIDs and antibiotics. It now intends to strengthen its presence and has initiated talks to market a range of products. Apart, registrations for some drugs are also on, said sources from Strides.