Karnataka Drugs and Pharmaceutical Association (KDPMA) sees that companies in the state will focus on inorganic growth and collaborative marketing initiatives to boost revenues, gain market share and drive expansions particularly for the small and medium enterprises(SMEs).There would also be an aggressive strategy by companies to grab contract manufacturing orders in 2015.

The association is now seriously working with the government to set up a pharma park that will not only help companies to set up their own production plants but also to give an impetus to contract manufacturing, Jatish N Seth, president, KDPMA told Pharmabiz.

The pharma park will be self-contained and KDPMA is scouting for suitable land not more than 80 to 90 km from Bengaluru, since it will be close to the international airport and help simplify the logistics.

In June this year, one of the oldest pharma companies in the state, Medreich Ltd, was acquired by Japan’s Meiji Seika Pharma Co for Rs. 1,720 crore .

And later this year, the state’s medium sized pharma company Jagadale Industries sold its ORS-L brand, a ready-to-drink product  enriched with electrolytes, to Singapore-based Johnson & Johnson Pte for Rs. 750 crore a few months later.   

The two acquisitions have set the pace for inorganic growth and such a strategy would thwart escalating operating expenses and help companies prevail in the drug price cut regime which is eroding  profitability, Seth, said.  

In the last 12 months, there have been no new drug launches in the state. Therefore, companies are looking to partner and tap global market opportunities or consider to be acquired by large pharma that are looking for units with a right fit to enhance their production capacities and market reach.

Karnataka is poised to take Prime Minister Narendra Modi’s Make in India campaign forward since the state has been a key hub for contract research and manufacturing services (CRAMS). From Syngene, Kemwell to Stabicon, Remedix, Srushti Pharmaceuticals, Juggat Pharma, Ce Chem and Madhur Pharma, the state’s companies have been recognized for their quality manufacturing and timeline deliveries by demanding global majors. Moreover, Karnataka has the right mix of talent and internationally audited facilities.

The Make In India campaign would spur contract manufacturing opportunities and this would be a booster shot for SMEs in the state, noted the KDPMA president.

Several companies also successfully completed international regulatory audits reinstating quality parameters in the wake of global regulators ejecting products of several Indian companies.

The year 2014 has been one of the more difficult ones for companies to drive growth primarily because of subdued global and national economic environment and stringent regulations. There are issues to access funds for small and medium pharma enterprises. Therefore, drug manufacturers in the state are hopeful that 2015 would be far more favorable for growth, said the KDPMA president.