Bringing glory back to Goa

While the sun set on the last century, it started shining bright on the burgeoning pharma industry in Goa. Pharma bigwigs like Glenmark, Zydus Cadila Health Care, Unichem, Lupin, Ratio Pharma, Watson, Ranbaxy, Aventis, Cipla, Wyeth, Abbott rushed to set up their manufacturing units in the coastal state after it became a tax haven in mid-1990s. The industry’s growth projectile continued to climb up well into the 21st century and the pharma sector emerged as a major component in the industrial development of Goa. Today, the state enjoys the status of being one of the biggest pharma hubs in India, with ample generic R&D and manufacturing facilities. Home to as many as 70 companies, the state now exports about 80 per cent of its total manufactured products to the globe, including heavily regulated markets like the US and the EU. Needless to say, the contribution of the the Goa Pharma Inc to the net national pharma exports is quite noteworthy.

A transforming landscape
Presently, the Indian pharma industry enjoys a double-digit growth – India’s pharma exports rose 11 per cent to $19.2 billion in 2018-19, accounting for about six per cent of the country’s total
exports of $331 billion in this fiscal, according to a report published by Pharmexcil. However, the industry could be facing a rocky road ahead. Mahesh Gurnasinghani, Senior GM, Pharma Technology Transfer, Watson Pharma notes, “In the recent times it (the Indian pharma industry) has been impacted by several challenges like patent cliffs, substantial price erosion, decreased value from new product launches, consolidation of supply chain and increase in competition with increased regulatory scrutiny in the global market. Our position as a global supplier of good quality, affordable, accessible medicines has also been impacted due to the recent compliance challenges and low productivity.”

Incidentally, Goa too has been mirroring this downward trend. “Goa in the last five years might not have had the expected growth, like it grew in the early 2000s,” Gurnasinghani adds. So, what changed in the last decade and affected the growth momentum of the Goa Pharma Inc?
And what can be done to set things right?

“The first step is to acknowledge the forces at play and redefine our strategies and operating models to address them. Thus, we need to focus on some of the major dynamic influencing factors,” advises Gurnasinghani.

Quality and compliance – mandatory for progress
One of the most pressing factors that impact the growth of any industry is quality and compliance. But, the industry and the regulators often end up locking horns over these issues.
“Almost 80-90 per cent exports from Goa are to the US. So, quality compliance is a worrisome issue that needs to be tackled very carefully in times when the US FDA is giving out warning letters quite frequently. This may have also contributed to shutting down of R&D facilities. Many companies are reducing their workforce in R&D. Even the manufacturing sector has taken a hit,” explains AV Kiran, Head – R&D, Sanofi India.

And, as 483 citations and warning letters become common, operations are affected and the brunt is borne by companies which are forced to pause their production activities. Similarly, compliance issues with domestic regulations too have often disrupted the industry. For instance, the Indian government’s ban on fixed-dose combination drugs in 2018. Pankaj Kumar, Associate VP, R&D, Wallace Pharmaceuticals points out, “I agree that there has been a problem with fixed-dose combinations. However, FDA mandates that products which have been in the market for 40-50 years should also undergo post marketing surveilence (PMS) studies. It may be possible for big companies to afford that, but such procedures can take a financial toll on smaller companies. It can even lead to them closing down segments of their businesses.”

The FDA, however, has a different outlook. Maintaining that patient safety comes first, Jyoti Sardesai, Director, FDA, Goa states that regulations are made more stringent so that it can be ensured that the manufactured medicines are safe, effective and affordable. And for a heavily export-oriented industry, Goa has to meet even stricter compliance guidelines. The government, she explains, only helps the manufacturers fulfil these requirements.

“The FDA is here to help the industry achieve sustainable growth. To remain in competition, manufacturers must ensure that their products are up to standards in terms of quality. Medicines should deliver the right effect. Government rules are framed in such a way that they help manufacturers achieve these requirements,” says Sardesai.

The industry also agrees that better quality and regulatory compliance is a must for sustained progress. Gurnasinghani too finds that better quality control is one of the first measures that the industry can take to ensure that it leads the global competition. “Manufacturers need to build a stronger quality system to achieve full compliance. Being a heavily regulated industry, we need to make our systems very sturdy and full proof so that we are devoid of these compliance issues. This is the most basic thing that we must do – unless we have this, we will not be able to operate. Build a strong quality and compliance system is imperative,” he remarks.

Innovating for innovation
Generic drug manufacturing was a formula that worked quite well for Goa. But a surge in global competition, with R&D driven markets like South Korea changing the international market scenario, has made it more difficult for the India Pharma Inc, and Goa, to sustain solely on manufacturing generics. “In the 1990s, Goa set up an example for the pharma industry by setting up a lot of manufacturing facilities. But, since then, there has been no significant expansion. Only a handful of companies thought about setting up research and development facilities in Goa. This has been the biggest setback for Goa. In present times, the state is identified purely as a manufacturing hub,” states Kiran.

He said that the industry needs to shift its expertise from copying to innovation and emphasised that R&D is the key for Goa to achieve its development goals. “The kind of operational structure that works for the generic industry will not work for the innovation industry. We will have to first work on that,” points out Kiran.

Dr Praveen Khullar, Deputy Head Scientific & Technical support & Head of Global Development Centre, Goa – Sanofi Synthelabo also notes, “Lately, there has been a shrink in the R&D pipeline. And if the R&D pipeline is shrinking, then generics will also go down.” He stressed on the need to adapt to rapidly changing business environments as well as adopting innovative approaches. Speaking on this, Gurnasinghani observes, “We need to see how innovative we are in terms of innovations to be competitive in the market. In the end, we also need to look at alternative sourcing and sale sufficiencies in the intermediates. Though Goa does not allow APIs, we still need to see how these alternative materials can be used to sustain in terms of cost-effectiveness.”

Tapping the talent
Lack of innovation, and lack of R&D facilities has also impacted the talent pool that Goa is famed for. “This is a negative point for students who study in pharmacy colleges here, especially from Goa College of Pharmacy. Despite the college being one of the best in India for the sector, and despite it having great infrastructure and teaching standards, a lot of students with great potential miss out on opportunities due to lack of R&D infrastructure in the state. But this is also one of the biggest opportunities for Goa. Manufacturing facilities and startups looking at Goa should take note,” remarks Kiran. “It is the responsibility of the government and manufacturers to boost innovation and R&D capabilities in Goa by setting up research and development facilities, upgrading their infrastructure, government help, and using the quality talent pool already available in the state,” he adds.