The pharmaceutical industry in Gujarat is a success story of a synergised effort between the state government and the industry. During the last some years, it has risen like a phoenix from being an importer of bulk drugs and formulations, to not only a pharma hub within the country but also an export-oriented state. According to the recent reports on export data from the Pharmaceuticals Export Promotion Council (Pharmexcil), Gujarat ranks third in terms of exports after Maharashtra and Andhra Pradesh.

One of the biggest unique selling proposition (USP) of the state is its different approach to attract companies to the state. According to Dr H G Koshia, commissioner, Gujarat State Food and Drug Control Administration (FDCA), “The products that are manufactured in Gujarat are universally accepted around the world because we adhere to the top regulatory framework. But most importantly, we also have an industry that always supports us in our initiatives and follow these regulations properly.”

Today the overall contribution of the state in the domestic market is 45 per cent from the total turnover. Chirag H Doshi, vice chairman of the Indian Drug Manufacturer's Association (IDMA) Gujarat State Board, states that the credit for the growth goes to the government as it has provided a lot of impetus to the industry.

“The Vibrant Gujarat organised in every two years by the Gujarat government acts as a huge attraction for the prospective companies to set up their base in the state and it is evident by the steady increase in the MoUs signed between the government and the companies during the event. Moreover, the industrial policy of the state is constituted with a sole aim to bring in more business into the state which is coupled with high end infrastructural development and availability of a peaceful atmosphere for conducting business,”  Doshi informs.

First state regulatory body to participate in FIP
Taking marketing to a newer level, the Gujarat FDCA has gone a step further by becoming the first regulatory body in the country to participate in an event like International Pharmaceutical Federation (FIP). Koshia said that being a part of this event has exposed Gujarat and India as a whole to showcase the country's resourcefulness and reach in the pharmacy profession and education to the world.

“There was a lot of interest from the pharmacists and pharmaceutical scientists from about 132-member countries on the Gujarat pharma industry. The amount of the response that we were able to garner from this is outstanding and I am positive that this will reflect in further establishing the credibility of the state at the international level,” Koshia said.

CRO boom
Though known as the pharmaceutical hub of the country, today the state can boost of not only being a stronghold for pharma formulations but also for the CRO, CRAMS and medical device sector as well.  

Since the time Quintiles started from Ahmedabad in the late 80's, there has been no looking back as they were followed by many more indigenous CROs interested in setting up CROs in the state. 

According to Dr Koshia, there are 1,50,000 registered clinical trials that are being conducted around the world today. Out of which India conducts only about 1500 clinical trials of which nearly 40 per cent is being done in the state of Gujarat.

“Gujarat has a lion's share in the CRO and CRAMS sector as the state has attracted a lot of interest from national and international companies for doing business in the state. This is because the government is very proactive in highlighting our strengths and exploring it to our best potential,” informs Dr Koshia.

According to Apurva Shah, group managing director and Co-founder of Veeda Clinical Research, one of the reasons why Gujarat is at forefront of the growth in the CRO sector is because the state offers excellent  infrastructure along with right environment to foster businesses.

“Gujarat, particularly Ahmedabad, has been a centre for CROs, as large number of pharmaceutical companies are based in Gujarat and the state has a substantial number of medical and pharmacy colleges as well to support the growth,” informs Shah.

The initial activities in this segment began somewhere between 1995 to 96, when Pfizer and GSK started conducting global clinical trials in India. However, India started inking its name in this sector after 1998 to 99 with the establishment of many Indian CROs like Siro Clinpharm, Lambda Therapeutics, Veeda Clinical Research, etc.

Binoy Gardi, the group managing director and co-founder of Veeda Clinical Research informs that the CRO sector was pegged to be between 300-400 million in India in the year 2010. He added that though it is difficult to really measure the size of revenues coming from Gujarat, but it should be about 25 to 30 per cent of the country.

He states, “The current industry scenario is very volatile due to the changes happening in the pharmaceutical sector as there is a lot of consolidation and mergers happening, that alters the way the CROs grow.  However one thing which is evident is that the future for CROs is more promising than ever due to the large MNC pharmaceutical companies downsizing their internal R&D teams and outsourcing more. The CROs who will have specialisation in certain growth areas of R&D will prosper more than others.”

Focus on R&D
Industry feels that since R&D is a very important part of the whole  pharmaceutical drug development chain, measures should be taken to explore it for the benefits of the industry. As of now, the level of commitment for R&D is at a very nascent stage in the country. Shah suggests that the government should allocate funds for the training of all stakeholders of clinical research so that ethical research is done that will benefit the country in a social and economic manner. He further hopes that the government would also offer soft loans for the purchase of latest equipment and land to allow the industry to be at the forefront.

Speaking on the same lines, Gardi opines that the research work done by the CROs should also be given the same status as that is being given to the one that is done by the in-house pharmaceutical companies. This is to ensure that even the CROs could avail the benefits that are given to pharma companies.

Upping the ante
Though Gujarat has an edge over the others in doing business, many in the industry feels that the state could up the  ante with some needed changes in it.

The development of any business depends on the support from the Government. Kamlesh Patel, managing director, West-Coast Pharmaceutical states, “The regulatory body in the state is known for aggressively working for the industrial development in the state. Apart from organising events, the state also indulges in many activities that are focused on export oriented events to increase its potential at the international market.”

However, he quickly adds that in spite of all this, there are certain grey areas that need urgent attention. “One of the main problems faced by the pharma companies in Gujarat is the ongoing competition with the excise free zones.  The problem is that the companies located at these excise free zone are getting exemption in excise, income tax and sales tax while in Gujarat we have to pay all the taxes which is diverting the maximum bulk business to other states,” informs Patel.

Further he suggested that the State government should take up this matter with the central government and urge them to take some plausible steps to ensure uniformity of policies in all the states across the country.

Echoing the same, Doshi pointed out that even though due to the incentive policy by Central government, Small Scale Industry (SSI) and Micro, Small and Medium Enterprises (MSME) are facing problems in domestic market, Gujarat-based pharma manufacturers have found out another alternative by entering into the export business to tackle this issue. He adds, “This is mainly because the people from the state are entrepreneurs and quality conscious individuals who invest their own capital than depending on loan from outside.”

Suggesting better options to the government, IDMA opines that the industry could benefit more provided that the central government removes the DPCO Act.  It also suggests that there should be an excise exemption limit of <span class=WebRupee>Rs.</span> 5 crore for SSI and MSME.

Doshi concludes by saying that the government should organise more interactive sessions between the industry and regulatory authority so that they can share their issues with each other more frequently.