Union government need to take a decision on the National Pharmaceutical Pricing Policy (NPPP) and opt for Market Based Pricing (MBP) to support the Indian pharma industry. This would be the only way to enhance investments in research and development to help bring out new chemical entities.

Currently, there has been no solution on the horizon with regards to NPPP which is adding to the woes of the industry in the wake of global economic gloom along with the slow paced decisions on reforms in India, said Dilip Surana, chairman and managing director, Micro Labs.

“We need the MBP because it would benefit drug manufacturers. Present drug prices are low and detrimental for the growth of Indian pharma. The drug costing strategy should favour the industry. Indian pharma has been the producing drugs to control and treat conditions from chronic to fatal, besides these drugs are available even in remote regions. The scientific acumen in the country has been able to develop drugs for every molecule developed in the west covering cardiovascular to nephrology and oncology. There is both expertise and capability which now needs to be maximized. Therefore if the government does not back MBP, it will be killing a golden goose, Micro Labs CMD told Pharmabiz in an interaction.

The robust trend of filing ANDAs(abbreviated new drug applications) and DMFs (drug master files) together with the discovery of NCEs by Indian companies indicates the potential of the Indian pharma industry. Therefore MBP needs to implemented at the earliest to ensure that the earnings of pharma industry are not impacted, he added.

Micro Labs has been a strong player in the domestic formulation market. The company has made the required investments to tap the opportunities further. These include the a new facility in Goa for finished formulations to cater to the US and EU. Its Rs.200 crore investments at Sikkim for a finished formulation facility will be ready for pilot production in July this year and the full-fledged commissioning by mid-2013.

Ending March 2012, the company generated revenues to the tune of Rs.1750 crore. Of which the ratio of domestic sales to export earnings is 65:35. Out of its 12 production locations, the company has proven its competence in drugs for cardiology, diabetology, ophthalmology, and central nervous system which are also its prime revenue earners.

The company exports to 30 countries and has been an early entrant into the Emerging Markets which gives it an edge in terms of therapy comprehension and first mover advantage. Its US and EU market presence is expected to pay off in five years.

In order to drive its growth inorganically, it is looking for potential companies in the Emerging Markets and US. In South Africa, its facility for finished formulations accounted for Rs.100 crores. At Mexico, the company acquired the land but will take a while to start off activities from here, said Surana.