Despite all odds, the pharmaceutical manufacturing industry in Gujarat is looking forward to maintain its leadership position in the pharmaceutical map of India.
The pharma industry in Gujarat, which contributes 46 per cent of the pharmaceutical production in India and 17 per cent of India's pharma exports, is currently experiencing one of the major crisis in its history due to some of the recent policy decisions of the central government. The Schedule M deadline, which ended during 31st July 2005, has caused suspension of drug manufacturing activities of about 200 units, for not being able to comply with the mandatory requirements. Not long ago, 307 Indian Systems of Medicine (ISM) drug manufacturing units in the state had to close their shops for ever for not complying with the Schedule T mandatory requirements which came into force after 31st December 2002.
A further blow to the Gujarat pharma sector came in the form of MRP based excise duty, which severely affected 80 per cent of the 1300-odd formulation manufacturers in the state. Most of these small and medium units are dependent on 30 odd major units for contract manufacturing and many have been forced to migrate their units to excise free zones. The existing large-scale units with plants in Gujarat are concentrating on converting their facilities for exports. According to IDMA Gujarat State Board sources, about 200 units from the state have set up manufacturing facilities in the excise free zones of Himachal and Uttaranchal and another 100 are in the process of migrating to the excise free zones.
The IDMA Gujarat State Board recently filed a case against central government in the State High Court against giving excise concessions to a particular region citing the notification discriminated against pharmaceutical units similarly situated in other states, violating Article 14 of the Indian Constitution. Further, the government notification violated Article 301 and 303 of the Indian Constitution, impairing inter-state trade. The notification also amounted to violation of fundamental rights guaranteed under Article 19-(1)(g), which guarantees freedom of business, trade and profession in any part of the country. The case is still pending before the High Court.
Adding more woes, the recent floods caused damage and loss of production to numerous manufacturing units especially in Ahmedabad, Baroda and nearby districts. While Ahmedabad has around 80, Baroda has nearly 60, Bhavnagar - 30, Surendranagar - 25 and about 40 units mainly in bulk drug production are located in Ankleswar, besides numerous units at Mehsana, Vapi and Valsad districts. Even the state FDCA's drug control laboratory in Vadodara was damaged severally in the floods causing damages to the tune of over Rs.3 crores.
Sources estimate that drug production from Gujarat, which was to the tune of drugs worth over Rs.15,750 crore could reduce significantly in the current year and the ensuing years due to these factors.
However, unfazed by the negative factors, the pharma industry in Gujarat is keen to overcome the challenges. Industry sources cite that excellent physical infrastructure, technical training institutions like LMCP, which was established in 1947, and the B V Patel Pharmaceutical Education & Research Centre started in 1990, availability of quality and cheap labour were some of the factors that contributed to the growth of industry in the state. Further, the state Government has been giving excellent support to the state industry. Reversal of detrimental policy initiatives, coupled with a few favorable policy decisions could make the Gujarat industry retains its leadership position, aver sources.
With the new patent regime opening up a window of opportunities worldwide, even the small and medium scale manufacturers in Gujarat are keen to keep up with the changing times. About 20 like-minded small and medium scale manufacturers in and around Ahmedabad are uniting together to form an e-pharma portal to jointly explore marketing opportunities and develop business world wide and the state government is likely to part finance this project, according to sources.
Development of the proposed pharma biotech park, establishment of an R&D institution like NIPER in Gujarat, ensuring the availability of skilled persons at various levels, a training institute for pharma tech professionals are some of the demands of the state industry. Sources cite senior officials with the Ministry of Chemicals and Fertilizers have agreed to give Gujarat a NIPER like institution as part of five such centres coming up in different parts of the country, and on hearing the news, the state Industries Commissioner Arvind Agarwal offered to give 100 acres of land free for the project.