With the division of erstwhile Andhra Pradesh in to Telangana and Andhra states, both the governments need to put in their efforts to identify new pockets for pharma growth and accordingly revamp their policies to accommodate new investments, push more R&D and strengthen infrastructure, says S.V.Krishna Prasad, Managing Director and CEO of Cito Healthcare, in an interview with Amguth Raju.
Erstwhile Andhra Pradesh was regarded as the biggest hub for bulk drug manufacturing industry in India. Post bifurcation, how do you see the growth prospects of pharma industry in both states of Andhra Pradesh and Telangana?
Certainly, the united Andhra Pradesh has been one of the prominent bulk active manufacturing hubs in India. Once it stood as the number one too. Now it is at the third position in the country.
Hyderabad and the neighbouring districts of Medak, Sangareddy, Rangareddy, Nalgonda and Mahabubnagar are areas established with numerous bulk drug and intermediate manufacturers starting from small, medium up to large units. Visakhapatnam’s Paravada is another hub in the state. It is wrong to feel that bifurcation would lead to migration. While already established areas would continue to flourish, new avenues would be sought . Thus I expect all round development in both the regions of Telangana and Andhra Pradesh.
Of late the state governments of Telangana and Andhra Pradesh have been announcing big ticket investments in Pharma city and Pharma industrial corridors . How do you view this ?
The latest announcement came from the Govt. of Telangana when it declared allocation of a 7000 acre area for a pharmacity. Govt of AP has plans to ensure pharmaceutical clusters are created possibly in Guntur and Anantapur districts. A pharma policy is also expected to be unveiled soon. As Telangana already has an established pharma industry, expansion and increasing the present capacity in larger areas were promised by the CM.
In AP, the government apparently is carefully assessing the situation and forming a sound policy which provides it the preventive checks on the shortcomings found in the industry’s development done so far in the state. For example, Paravada is found to be short of space for expansion plans. Both the governments know that pharmaceuticals is a sun rise industry and one of the most promising one both for revenue generation for the government and employment opportunities.
What according to you are the major issues plaguing pharma industry in both Telangana and Andhra Pradesh?
The bureaucracy and hindrances in the policy are the major issues for the industry from the government side. Certainly, infrastructure is the second and another key issue. Telangana has started experiencing power cuts which is quite detrimental to the industry’s growth while Andhra Pradesh is now a 100 per cent powered state . Water is one of the most important ingredients for the pharmaceutical industry whether it is APIs, intermediates or formulations. From this point of view, inter-state disputes themselves are creating problems for the free usage of water; adding another state would result in more problems. The governments should quickly sit across table and clear the problems based on mutual trust and with a sense of flexibility.
In terms of transportation, the Golden Quadrilateral project of the GOI has brought in good connectivity. The present government too is keen on furthering the efforts in that direction. Both Telangana and Andhra Pradesh barring their respective cities of Hyderabad and Visakhapatnam can not boast of good connectivity excepting the national highways. It is here that both the governments should take care to ensure that each of the pharma clusters planned are connected with their nearest cities with black topped/cement topped roads including the facilities for refuelling of the vehicles en-route, vehicle repair possibilities, kiosks for vehicle driver breaks etc.
In terms of storage /warehousing, both governments would have to ensure if required with both the state warehousing and central warehousing corporations including the existing and proposed international airports sufficient and suitable storage place for raw materials, semi finished and finished formulation material movement. While Shamshabad has multiple storage facilities, for a greenfield airport of its kind, it needs to have more excise/customs bonded storage facilities. For AP government, this is a point to be noted for its future international airports in areas such as Gannavaram, Tirupati and more along with Visakhapatnam which also has limited storage space (however, this could be given the first priority for expansion).
Presently, there is a state of suspended animation in the APPCB. CPCB should step in to set the house in order to see that the bifurcation is done to speed up the policy changes, implementations especially in the bulk drug manufacturing pockets of Hyderabad, Medak, Ranga Reddy, Visakhapatnam corridors for a sustainable environment and effluent treatment including secure disposal.
In the past, particularly the pharma industry in Hyderabad has been marred with various problems like power shortage, strikes and unnecessary harassment from the APPCB officials and other anti-social elements? Post bifurcation how do you view the situation?
Unfortunately, there may not be much change in these factors for Telangana as of now. A firm leadership and least political interference are the requirements in both the areas where the industry leaders are accountable are the factors to be guiding the pharma industry policy. Andhra Pradesh has a chance to learn from these and firm up their policy accordingly. For Telangana, power is worrisome and certainly a reason why shifting the bases happens.
We understand now that the Govt of Telangana is trying to purchase power from other states which could meet some of the demands but we need to wait and watch the progress here. Very few strikes are for genuine demands. There has to be change in the mindset of all the stake-holders to avoid the situation where the productivity halts. Pollution is a problem especially for bulk drugs. There are solutions for containing the damages that could occur. It requires an objective PCB which understands the practical side of every issue and also be firm, corruption free and which does not harass stake-holders
How conducive is the situation for new expansions and new investments in pharma and biotechnology sectors in both the states? Do you feel both the governments need to revamp their pharma policies to attract more investments ?
Telangana has already a set climate in terms of policies, infrastructure and the establishment. Thrust here should be to smoothen the expansion process from the point of all the stake- holders. For AP, barring Visakhapatnam, they would have to establish proposed clusters if not reinvent the wheel. Atmosphere is conducive for setting up as there is fundamental will to grow. Government and its policies certainly are to be a journey and not a destination on the path for the improvement and course corrections are needed where required.
Biotechnology in India is limited to three or four major players and the stake-holders take on Genetically Modified (GM) are wavering. There has to be a more focused approach on Biotechnology Technology (BT) as we progress and learn from the US. BIO is a case in example as
it is the world's largest biotechnology organization to further the BT cause. India should replicate the success of pharma in the biotech also by deploying more qualified personnel and having more graduates in this field.
Governments should aid the research and ensure low volume and high value pharma products are manufactured, with least polluting factors, encouraging climate protection by greening the initiatives. The policies should also look at expanding into natural extracts for medicines with AYUSH organization strengthened; bring it regulatory compliance levels with sufficient quality assurances beyond the synthetic varieties; encourage viable units by incentivizing new initiatives with tax concessions with a road map where in upon the breakeven or a specific milestone, gradual withdrawal of subsidies and so on. Both the governments should quickly identify more pockets for the pharma growth, if required providing infrastructure to develop new areas on a sustainable basis, keeping bench marks for the trained manpower and appropriate deployment, encouraging PPP in each of these areas with sufficient checks and balances so that projects become viable. These are some of the measures those at the helm in AP and Telangana should ensure.
With Hyderabad and surrounding region being concentrated with hundreds of pharma and bulk drug manufacturing industries, how do you view the environmental issues in the state?
As bulk drugs are relatively more polluting than their formulation counterparts, lesser the bulk drugs production , lesser the pollution. But since the growth target for the pharma industry has a substantial bulk drug element in it and for matters of economy, it may make better sense to make than buy them. Since Hyderabad is largely present in bulk activities, the answer is to have optimum anti-pollution measures and industries proposed to be located in new designated estates having a set radius within which there is no proliferation of units.
Which are the companies that are regarded as the biggest contributors to pharma exports in Telangana and Andhra Pradesh?
Among the leading exporters, Dr. Reddys Laboratories, Aurobindo Pharma, MSN Laboratories, Mylan Laboratories etc are well established in both the states. With government support, in both sides, many more leading companies may come up as leading exporters of pharma products in the coming days.
What are the growth prospects for herbals and Ayush manufacturing industry in Andhra Pradesh and Telangana? What according to you are the major problems faced by herbal manufacturers ?
There is a large and untapped potential for AYUSH and steps are needed by both the governments to focus on it. With vast areas of forest land, making it feasible for orderly growth for identifying and proliferating natural elements are required. Pharmacognosy should be given a prominence by both the governments.
Which are the districts in new AP that can attract good investments or expansions in pharma and biotechnology sectors?
It would be Guntur and Anantapur at the moment and more may come as the planning is swiftly underway
In Telangana State, which are the new possible areas for setting up pharma and biotechnology industry?
Mahbubnagar has some SEZs, more could come over. Karimnagar is another we could look at
How do you see the R&D activity in pharma industry in both the states?
Well, most of the R&D activity is based in and around Hyderabad. AP needs to plan for setting up by the market leaders such as DRL, APL, Mylan and others.
What according to you are the major problems faced SMEs sector and what according to you the state and central governments should do to encourage new entrepreneurs in this segment?
Actually, SMEs are state’s assets as they move into support biggies under the CRAMS format.
But unlike their experienced brother’s financially sounder biggies, they need a common platform to avail large-scale economies. To an extent, Pharmexcil is presenting the opportunity both nationally and certainly internationally.
The recent DPCO has brought about 348 drugs under price control, which is viewed as a big blow to the growth of pharma industry, how do you view this?
DPCO would continue to be there in most of the countries by some name or other and it serves the main objective of the industry which is to bring the medicines within the reach of the common man. This is also expected to ensure prevention of undue profiteering by a few. The intentions are clear. Volumes would set off the possible reduction in revenues of the manufacturers due to DPCO.
Globally also the Indian pharma exporters are facing various regulatory issues in the EU, USA, Russia etc. What should the Indian manufacturers need to overcome these hurdles?
This is true. We all have to realize that the humanity looks up to the pharmaceutical industry for safe and effective pharmaceutical support for bringing relief or treating their diseases. Just like the GIGO concept in IT, improper inputs give improper outputs. We should believe in our own products for which we need to strictly adhere to ICH guidelines on manufacturing and research. What we need to address are mainly the quality and compliance issues which are apparently the ones getting projected. While quantity is important for growth, qualitative compliance actually gives you long term sustenance. Even today India is the next nation after the US which is respected by the US drug regulator the most. One of the biggest numbers of ANDAs in the world is submitted by an Indian company viz. Aurobindo Pharma. There are sensitive issues concerning IPR, Compulsory Licensing etc. which need to be addressed by the professionals both Indian and overseas including involving regulators and IPR professional from time to time to find resolutions to the possible problems. Let’s have procedures and systems in place.
Japan and China have been tough markets for Indian pharma segment to enter in, what are the major issues concerning these countries?
Chinese productivity even till date is expected to be better than India’s. We need to see how we could adopt their methods. Having said that Chinese industry took lot many inputs from India and they progressed whether it is bulk manufacturing, formulating or even professional supply chains. Japan is a potential associate, the initiatives of Ranbaxy and Sun Pharma including Daiichi Sankyo is a case in point. Yes, even in clinical trials, there is huge potential for India to support Japan and China.
Could you tell us something about Cito Healthcare and its activities?
Cito has been founded in 2010 and has four verticals. We aim at marketing and business development services to pharmaceuticals and healthcare domains by product sourcing covering APIs, formulations, neutraceuticals and natural medicinal extracts. We also focus on clinical trials spanning pre-clinical, BA/BEs, POCs, and CEPs, early and late stages. We also have plans to getting into agriculture and pharmacognosy related segments and very recently, a senior professional who headed rice research from a reputed institution joined us.
After bifurcation of Andhra Pradesh in to Telangana and AP states, Cito Healthcare specifically met both the states officials including Jayesh Ranjan of Telangana and C.Kutumba Rao, Vice Chairman Planning Commission from AP, J.A.Choudhary, Vice Chair- FICCI, to bring about a healthy and competitive progress in pharmaceutical industry. This we believe would fructify and help in the progress of both the states industries in general as well.