Even as there is a decline in investments by new pharma companies in Bangalore for the last four to five years, the trend among the existing pharma companies here is to go in for expansion plans. AstraZeneca Research Foundation, which received a $10 million approval for setting up an R&D cell, is already on the additional expansion process and the other three companies; Kemwell Group, Medreich Sterilabs and Strides Arcolabs have also gone in for expansion in the city.
Commenting on the decline in new entries and existing companies' thrust on R&D expansion in Karnataka, senior officials from pharma companies like Anglo French, AstraZeneca, Bal Pharma, Micro Labs said that the industrial environment in Karnataka is congenial for pharmaceutical production. The reasons for decline in pharmaceutical investments is the State's inclination towards information technology (IT) projects and more recent biotechnology (BT) ventures.
"The State government needs to take a proactive approach to promote pharmaceutical units which is more intellectually - drive than the IT industry because of the complexities in production, R&D and operations of the plant, informed Dr. KN Subbaswami, director, Resonance Laboratories and president, Karnataka Drugs and Pharmaceuticals Manufacturers' Association (KDPMA).
The Drug Price Control Order is another issue for no investments as the margins earned by existing companies are at stake. When the total turnover of the national pharma sector is pegged at Rs. 18,000 crore, Karnataka's share is eight per cent. While the national growth in the sector is 15 percent, Karnataka has kept pace with the same rate, said Dr. Subbaswami. "Karnataka could be a promising pharma destination, only if the government provides adequate infrastructure support," he added.
On the general investment scenario in the sector, R. Anand Raja Shekar, drugs controller, government of Karnataka, said that the picture is not encouraging for investments going by the performance of most companies except for those serving the MNCs.
G Jayaraj, product manager, Micro Labs, said, "Competition and government regulations are pushing the prices downwards, which is affecting the growth and profitability of the overall pharmaceutical market in India. "The current issue, which is prime concern in the State is price control and impending GATT stipulations, which is of prime concern for the pharma sector in the State. "
If IT and BT are encouraged to come up in and around Bangalore, there is no need for pharmaceuticals to be neglected as it is equally a manpower and capital-intensive industry. Bangalore has the infrastructure to support the growth of pharmaceutical sector. Unless the government is serious about infrastructure, industries cannot function, pointed out Dr. Subbaswami.