In the past decade Gujarat has achieved rapid economic growth. Driven by massive industrialisation, the state's economy expanded by an average of 10 per cent every year between 2004 and 2012 - above the Indian average of about 8.25 per cent. Now Gujarat is recognised as one of the most prosperous states in India and aims at becoming a model state on all fronts of human development.
Much of the credit for Gujarat's apparent economic success has been attributed to the man who is today the leader of the nation itself and who is keen to replicate the Gujarat success story in the national level. Thus Gujarat is increasingly stealing the limelight in the socio -economic -political landscape of India
At the same time with substantial advances in science and technology, the research based pharma industry has been entering an exciting new era in medicines development, and where does Gujarat stand in this industry?
According to the data shared by the Gujarat Food and Drugs Control Administration (FDCA) the turnover of Gujarat pharmaceutical industry was worth US $ 7.8 billion in 2013-14; while exports was worth around US$ 2.83 billion.
Industry experts predict that Gujarat, an established manufacturing base for bulk drugs and formulations, is fast proving out to be a one - stop solution for investors globally to become a pharmaceuticals hub. In fact, Gujarat has always been an ideal choice for investors from the healthcare sector which includes the pharma, medical devices, ASU and CRO industry to set up their base due to its industry friendly policy, coupled with its legal and financial framework, competent workforce, cost-effective chemical synthesis, consolidation, IT etc.
Along with the increasing investments in R&D, launch of new products and entering into new alliances, Gujarat - based pharmaceutical companies could establish a strong presence in domestic as well as international markets. They have beefed up the national as well as international presence by setting up multiple manufacturing sites in the US, Europe, India and other emerging markets.
With investments in new capacities, several Gujarat-based companies could offer global outsourcing partnerships to international players. Since the overall growth in new markets will be a critical factor to sustain global product revenues, these companies are gearing up to consolidate their position.
More than a century of rich expertise
What makes Gujarat stand out as a pharma hub of the country, is its uniqueness in attracting and marketing itself to the world. The biggest unique selling proposition (USP) of the state is the strength in having a industry friendly policy that attracts companies to come and set up their base in Gujarat.
Ever since the first pharma company Alembic was established in the state 109 years back, there have been no looking back. Since Alembic, the state has been home to a number of top domestic as well as overseas companies from the pharma, medical device and CRO sectors. Some of the top companies having base in Gujarat include Sun Pharma, Glenmark, Claris, Cadila Pharmaceuticals, Intas, Dishman, Torrent Pharma, Zydus Cadila and international giants like Teva. In fact the Teva Sanand OTC facility represents a critical component of Geneva head-quartered PGT Healthcare, a part of Teva’s international partnership and joint venture with Procter & Gamble.
Out of the total 3324 manufacturing units in the state, 2299 are allopathic manufacturing units, 639 are ayurvedic, 378 are cosmetic while eight are homoeopathic manufacturing units. The total sales units in Gujarat are 30,335 plus; out of which 48 per cent units are retailers and 42 per cent are wholesalers and the rest 10 per cent serve both categories.
The state manufactures and exports different dosage forms including generic drugs, intricate vaccines, r-DNA products, cytotoxic drugs external preparations, sex hormone drugs, small and large volume parenteral, APIs, hi-tech cardiac stents bio-pharma products etc. Gujarat has the distinction of producing not only 80 per cent of the world’s soniazid used for treatment of tuberculosis but also is the only manufacturer of doxorubicin HCL liposome injection in the World. It is also the only state in the country wherein Vitamin C and dapsone is manufactured in India.
According to Dr H G Koshia, commissioner, Food & Drugs Control Administration, all this possible because the state has a stable and highly placed drug regulatory system that has proved to be the biggest support for companies interested in setting up their base in the state.
Moreover since Gujarat is the first state in the country to issue license through IT application, success of this had prompted 12 other states to adopt this model.
Industry friendly policy and regulatory set up
One of the biggest testaments to Gujarat’s success story is the fact that 33 per cent of India’s pharma sector turnover and 28 per cent of pharma exports comes from Gujarat. It has four pharma clustres: one in Ahmedabad dedicated for formulations, APIs, biologicals and contract manufacturing; Vadodara cluster which is dedicated to manufacturing formulations, biogenerics; Bharuch and Ankleshwar cluster dedicated for APIs, formulations and vaccines and finally, Vapi or Valsad cluster for formulations, APIs, device and diagnostics.
What makes Gujarat an ideal destination is its industry friendly approach vouch industry. Experts point out that the state government has been playing a big role in attracting companies to the state through promotion of generic drugs by giving them preference in the government schemes; incentivising all the R&D initiatives by providing tax benefits to encourage the same. In a unique approach the state government had even established Gujarat genomics initiatives, genetic centres and gene banks.
An industry source informed that, as per the scheme for Assistance to Manufacturing Sector-2013, the state government plans to provide graded interest subsidy for five years at seven per cent for MSMEs and two per cent for large industries having an actual investment up to Rs 100 crore (US $ 16.67 million).
The government also plans to provide an incentive of 50 per cent of the total expenditure up to Rs 20 crore (US $ 33.33 million) for a new industrial park and for core infrastructure development within the park. The Gujarat government also plans to provide assistance up to 80 per cent of the total expenditure up to Rs10 crore (US $ 16.67 million) for the cost of core facilities and assistance of 70 per cent of the total expenditure including recurring expenditure of three years up to Rs 20 crore (US $ 33.33 million) for national level centre of excellence
According to a highly placed source from Gujarat IDMA,not only the government has been pro- active in supporting the industry friendly policies, even the regulatory scenario had been helpful in boosting the confidence and business.
For quick disposal of various documents like CoPP, NCC and FSC, FDCA has started the process of IT application, which is also apt for issuance of manufacturing license, sales license and product license implemented by FDCA. These initiatives have been a great help for them as it saves a lot of valuable time and brings in transparency into the system, aver industry.
Other important sectors
Apart from being pharma hub,Gujarat is also establishing a strong leadership in other sectors as well. One such notable industry is the medical device industry.Dr Koshia point outs that the medical device companies in Gujarat are competent enough to take care of all critical aspects like biocompatibility, toxicological and stability testing, validation process as well as design and development.
While 70 per cent of India’s cardiac stents are manufactured in Gujarat, the state also has the credit of manufacturing 50 per cent of India’s intra-ocular lenses,58 per cent of orthopaedic implants and 40 per cent of machinery for pharma sector.
According to D L Pandya, an expert from the medical device industry, there is a lot of untapped opportunities emerging in the global medical devices sector. However there is not enough awareness about the same. Government support is essential to tap the full potential of the sector, he pointed out.
“Though the government is doing its bit , more efforts are needed for better results, for which industry and the government need to work together. We need a well established allied industries and ecosystem that will help the industry grow and expand its potential further and meet the ever growing challenges,” he said.
Like medical device industry, the biotech and CRO industry is also fast catching up in the state. The state government has identified biotechnology as most potential tool for development and has formed a dedicated department for R&D in the sector, Gujarat State BioTechnology Mission. Industry insiders informed that enhanced level of investment in R&D by local industry with support of the government will go a long way in providing research-driven and high value services.
Establishment of National Institute for Pharmaceutical Education and Research (NIPER) for Human resource development and establishment of Centre of excellence for clinical research and various sectors of biotechnology has also helped the biotech and clinical trial industry grow.
Vibrant Gujarat summit
The other event that is synonymous with Gujarat is the Vibrant Gujarat (VG) trade summit, a biennial event that had helped put Gujarat on the global landscape. The event which is in the seventh edition will be held in Gujarat in January 2015 , further opening market opportunities in almost 18 sectors, in which pharma sector plays a major role.
Not only does the VG summit presents a varied investment opportunity in the pharma sector but also opens up opportunities for investment in Contract Research Organisation (CRO), clinical research, genetic engineering and setting of R&D centres etc. It is understood that serious consideration is also being given to explore opportunities for investment in retail stores and pharmacy chains too.
Apart from brining in investment , the VG also helps in generating job opportunities as well. It is understood that seven per cent of total industrial production in India is from Gujarat, which helps provide employment opportunity to around 75,000 people in the pharmaceutical sector.