Pharmaceutical industry in India is passing through a bad phase since last year after its brilliant performance during the past five years or more. It is experiencing this situation mainly on account of the hurdles the industry is facing in the overseas markets. The main reason for the drop in India’s pharmaceuticals exports is the economic slow down faced by both the US and Europe. These two key markets for India’s generic drugs and APIs also seem to be also adopting import restrictive policies of late. While exports to North America grew 13.44 per cent to $ 4 billion during 2012-13, exports to Europe grew marginally by just 1.2 per cent to $2.63 billion in the same year. In the previous year, exports to North America and Europe registered a growth of 33 per cent and 30 per cent, respectively. Export prospects in other markets such as Latin America, CIS countries and Africa also do not look that promising as the governments in these countries have commenced indigenous production of drugs in a bid to achieve self reliance. China's increased competition with India even in formulations sector in Europe is yet another worrying factor.

As per an estimate made by the Department of Commerce, the pharmaceutical exports during the current year may fall short by at least 30 per cent of the target set by the Government sometime back. As against the target of US$ 25 billion for 2013-14, it is estimated that India can only achieve US$ 17 billion worth of exports. The growth of Indian pharmaceutical exports during 2012-13 came down to 10.55 per cent over previous year with export of just $14.6 billion. Whereas during 2011-12 the exports stood at $13.2 billion registering a growth of 23.7 per cent over 2010-11. The problems for Indian pharmaceutical sector started from last year when the US FDA introduced 'Generic Drugs User Fee Amendment (GDUFA) on formulation exports. Imposition of GDUFA by the US FDA on pharmaceutical exports has been a huge burden to the Indian pharma companies. Now the US is planning to effect a hike of 24 per cent on ANDA filing and another 48 per cent hike on drug master filing fees from October this year. With this, the pharma companies are required to pay as much as $63,860 per application of ANDA and $31,460 for each drug master filings. It is possible that such heavy charges on Indian companies are likely to make the country’s exports unviable to the US in the long run. Pharmexcil is already offering reimbursement of 50 per cent of the registration fee Indian companies have to pay in any country as an incentive to the exporters under MAI scheme. For some reasons, several large companies have not been taking this benefit. With the GDUFA and increased registration charges, exporters should take advantage of whatever government support to keep up the export drive. Simultaneously India needs to commence high level talks with the US government to convince it to stop imposing such huge levies on cheap and quality Indian generic drugs required by millions of patients there.