By Kalpesh Damor, TNN
Over the last decade, Gujarati entrepreneurs in the pharmaceuticals space have gone global from being local. Gujarat’s pharma exports have jumped by 843% to US $5.35 billion in fiscal 2018-19 from a comparatively meagre US $562 million in 2005-06. In rupee terms, the exports have galloped forward by close to 1,400%, from approximately Rs 2,500 crore to Rs 37,300 crore during the same period. The exports growth of Gujarat has been stupendous in the last five fiscals. It has grown at a compound annual growth rate (CAGR) of 18.17% since 2014-15. As against this, during the same period the national CAGR remained at 4.54%.
"Regulatory compliance both locally and globally, and manufacture of better quality products are the major driving forces behind the stupendous growth in Gujarat’s pharma exports," says H G Koshia, commissioner, Gujarat Food and Drugs Control Administration (FDCA). A large chunk of Gujarat’s exports comprises formulations and bulk drugs.
The penchant of Gujarati entrepreneurs to reach for the export market is proved by the fact that as on date, the state houses 753 units certified according to World Health Organisation’s (WHO) Good Manufacturing Practice (GMP) norms. The US Foods and Drug Administration (USFDA) has approved 130 plants. "This shows that a growing number of pharma companies from the state are looking at international markets. Over the last decade, Gujarat pharma companies have become global, from being local companies," the drug commissioner adds. Gujarat-based pharma manufacturing companies supply their products across the world, including the US, Europe, Africa, Latin America and Asian countries, among others.
"A combination of factors has worked in the favour of Gujarat. Entrepreneurial vision and foresight, industry-friendly policies, a strong base of MSMEs, allied industries, well-developed infrastructure and an array of reputed educational institutions have all shaped Gujarat’s growth in pharmaceuticals over the years," says Sharvil Patel, managing director, Zydus Cadila. Its business in US formulations accounts for around half of the pharma major’s consolidated revenues. "The year 2018-19 was the most successful year for the company. It launched 43 new products during the year. The company also submitted 16 new dossiers to the regulatory authorities of different countries of the emerging markets," Patel added.
According to Jayesh Desai, executive director, Torrent group, development of SEZs, which have good infrastructure and related facilities, are helping pharma companies in Gujarat build a global mindset.
"Over the years, the industry has evolved to maintain high standards of manufacturing practices, and the pharma companies of Gujarat have been receiving approvals from all major international regulatory bodies like USFDA, EMA, MHRA etc," Desai adds.
With increasing investments in research and development, the companies have been building strong pipelines to establish their presence in the international markets. The international business of Torrent Pharmaceuticals has grown at a CAGR of 18% over the last 10 years. The company entered the US market in 2008 and currently has 90 ANDAs approved and 45 pending approvals.
For several pharma companies, however, the international market was not an obvious choice. "There is an interesting twist to pharma growth story of Gujarat. It was actually a hardship that turned into a blessing in disguise," recalls Koshia, the FDCA commissioner. Except bigger players such as Zydus Cadila, Alembic Pharmaceuticals, Torrent Pharma and Intas Pharmaceuticals Ltd etc, the export market was never a focus for most medium and small companies. It all started in 2005, when the central government made drug-manufacturing norms more stringent by adding a chapter to the drugs and Cosmetics Act 1940. These rules were close to the guidelines issued by WHO for drug manufacturing. "Back then, industry players resisted a lot as they had to upgrade their units according to the revised norms. As the regulator, we seized the opportunity and provided hand-holding to the industry so they could comply with the new norms," Koshia adds.
"Had GujFDCA not held their hands, around 200 units would have faced closure," Koshia explains. At the same time, tax incentives were announced in states like Himachal Pradesh, Sikkim. Manufacturing in these tax havens was cheaper than in non-exempted states. "Given the scenario, several small and medium players were left with only two options. One was to comply with higher standards (WHO norms) and tap the export market. The other was to move base to tax havens to remain competitive in the domestic market," says an insider.
The pharma companies had to get the WHO certification for the export market. Since the new rules adopted by India were close to the WHO norms, pharma units could get export-ready by upgrading their manufacturing processes to meet the requirements of WHO. The future looks even brighter now. "Gujarat currently has 33% and 28% market share in India’s pharma output and exports, respectively. With hundreds of new plants and a level-playing field after GST, the state’s share in both exports and production may reach 40% of that of the country in the near future," Viranchi Shah, Chairman, , Gujarat State Board, Indian Drug Manufacturers association, added.
[Courtesy: https://timesofindia.indiatimes.com/business/india-business/gujarat-pharma-prescribes-win-pill-to-world/articleshowprint/70954266.cms