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A milestone in the making

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Telangana’s proposed Pharma City will take the country’s pharma industry to the next level
By Prathiba Raju

The 29th state of India, Telangana, formed in the year 2014, is striving hard to make its mark globally by developing a world class Pharma City, located 70 kms from the city of Hyderabad. Spread across a sprawling 12,000 acres of land, the proposed ‘Pharma City’ is gradually taking its shape in Rangareddy and Mahbubnagar districts. Industry experts believe that the largest integrated industrial ‘Pharma City’ is going to be a milestone in the Indian pharmaceutical industry.

Department of Industrial Policy and Promotion (DIPP), Union Ministry of Commerce and Industry, has also accorded in-principle approval for setting up of National Investment Manufacturing Zone (NIMZ) for the proposed Pharma City. The government aims to build a sustainable ecosystem where pharma players across the value chain — intermediates/ bulk drug manufacturers to pharma formulations players, biotechnology players to R&D labs and education institutes — are likely to co-exist, enabling faster collaboration and evolution of the industry as a whole.

Pharma calling

Hyderabad is well known as the bulk drugs capital of India, which accounts for almost 20 per cent of pharma exports from the country and is now providing an impetus to the pharma industry by its proposed Pharma City project. The industry-friendly hub is likely to attract new investments in manufacturing and allied segments of the pharma industry.

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KT Rama Rao

“Hyderabad has been the bulk drugs capital of the country accommodating over 400 pharma companies and 173 bulk drug units spread all over the state. We would like to further enhance the pharma sector by setting up the mega ‘Pharma Çity,’ which can translate research capabilities into commercially viable products and contribute to the global pharma industry. The region has been blessed with diverse resources waiting to be tapped and we are making it possible,” said KT Rama Rao, Industries and IT Minister, Telangana. (Read exclusive interview ‘Telangana Pharma City: An investors’ paradise’ on pages 27-28)

The proposed Pharma City will have components and other related activities with regards to antibiotics, fermentation products, synthetic drugs, large volume chemical synthesis, intermediaries, vitamins, vaccines, drug formulations, nutraceuticals, herbal medicinal products, speciality chemicals. Also, it will have a R&D incubation centre, central testing facilities facilitating clinical trials, testing and certification, contract research and custom synthesis.

“Developing the largest integrated industrial city, keeping a focus exclusively on pharma and biotechnology products, is an exciting task,” Rao informed.

Rao further said, “The ‘Pharma City’ will have world-class facilities with state-of-the-art infrastructure. Discharged polluted water will be brought to zero discharge level from common effluent treatment plants, which will be set up in the proposed ‘Pharma City.’ It will be built according to international standards.”


Important Features of a Pharma City

Physical infrastructure: For the smooth functioning of Pharma City, one needs to ensure  adequate all-weather road network, captive power plant, power distribution network, electrical sub-stations and power feeders, effluent conveyance system, water overhead tanks, water reservoir and tanks, fresh and recycled water pipelines, steam pipelines, common solvent recovery plant, etc.

Environmental infrastructure: Pharma City should be eco-friendly, one must include facilities like water treatment plant, common effluent treatment plant with three-stage treatment, solid waste management, including a hazardous waste management centre, incinerator and a central environment management centre.

Civil infrastructure:  The pharma hub should require a common R&D facility, quality certification lab, material testing lab, administrative block, office space, fire control station, banks and ATMs, telephone and broadband connectivity centres, a guest house, etc.

Academia infrastructure: A steady flow of relevantly trained skilled manpower would require schools, universities, community housing, a hospital, shopping centres and training centres.

Logistics infrastructure: Common logistics centre with container terminal need to be appropriately planned to ensure that pharma products reach domestic buyers and export points, such as ports and airports. Airport and railway connectivity is of paramount importance for the success of a pharma city.

Source: KPMG


According to KPMG report, in recent times, India is facing stiff competition from countries like China, especially in intermediates and API business. For India, to maintain its dominant position in the global generics market, there is a need for continuous investment to scale up manufacturing capabilities. The proposed Pharma City will help India to become more cost competitive in the international market.

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Utkarsh Palnitkar

“The proposed Pharma City would help to adopt new technologies along with world-class infrastructure. It would focus on R&D, which can help India move up the value chain to manufacture complex products. Products worth $129 billion will lose their patents during 2016–20 with most of them belonging to therapeutic areas that require complex manufacturing processes, such as oncology (27 per cent), immunology (20 per cent) and cardiovascular (19 per cent). In this aspect, various provisions under the proposed Pharma City is likely to provide an environment where R&D and process innovation may support manufacturing of these complex products in India. It will help India gain a share in the complex formulations market as well,” said Utkarsh Palnitkar, Head – Lifesciences, KPMG India.

India, being the largest supplier of cost-effective generic medicines to the developed world, is on its path of becoming a leader in pharma exports. With a widest range of benefits, be in terms of labour cost, R&D cost or scientific manpower, India offers myriad opportunities for growth. Hubs like Pharma City are always welcome and will be an added benefit to the industry. The integrated approach where industry, R&D centres, academia and start-ups could work together, the proposed Pharma City project is expected to help India become capable in manufacturing complex products, allowing growth in exports. It will also fulfill domestic demands.

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Jaiprakash S Vastrad

Informing about the upcoming Pharma City as a major attraction, Jaiprakash S Vastrad, Sr General Manager – Pharmacy, Sagar Hospitals said, “Any state that supports the pharma sector will witness a decent growth in its economy. At a time, when most of the investments are directed towards the IT sector, Telangana, by developing the Pharma City has put things on the right track to attract more investments in the sector. Definitely, it has a huge growth potential and hence will contribute to the healthy economy of the state.

He further said, “Telangana has already carved a niche for itself by being one of the leading suppliers of bulk drugs of highest quality. At a time when Government of India’s new policies are attracting a lot of MNCs to set up their manufacturing facilities in India, Telangana’s proposed Pharma City, which promises good infrastructure, has been able to attract several MNCs, who have expressed their interest in setting up their manufacturing facilities over here. Quality infrastructure, friendly government policies and proximity to major bulk drug suppliers will definitely attract investors in the pharma sector.”

Operating in a conducive ecosystem like that of a ‘Pharma City’ will be beneficial for large and small scale manufacturers, both in terms of scale and efficiency, opined manufacturers.

Ground for growth

20161115ep22According to Palnitkar, small and medium pharma companies are major players in the Indian pharma industry, which contribute approximately 48 per cent of the country’s pharma exports. He further mentioned that the Indian pharma industry is fragmented. Strict regulations, financial crisis, high competition from existing and other low-cost nations make it extremely difficult for SME players to scale up.

“This project is expected to provide shared infrastructure and utilities to SMEs and this would help them reduce their overhead costs and become cost competitive in the near future, while providing access to world class infrastructure. It is also expected to support big pharma companies to establish large manufacturing base, to compete against dominant players from countries like China, and help them achieve economies of scale to become cost competitive in the export market,” he added.

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According to experts, the proposed Pharma City should also focus to develop an SME centre, which will help small and medium-sized pharma companies with infrastructural support. Common infrastructural facilities will help SMEs share the cost and remain cost-competitive in the market. Further, to encourage innovation in the industry, it could develop adequate incubation support centres for start ups.

Alluring investors

As per an official in Telangana State Industrial Infrastructure Corporation (TSIIC), many big pharma companies, both national and international, who have their headquarters in different parts of the country, are showing interest in opening their units in the upcoming Pharma City, even though it is yet to start operations.


The proposed pharma city integrated physical  and social infrastructure

  • External road, rail, water, power linkages.
  • Well developed plots with all utility linkages – steam, fresh water, recycled water, wastewater conveyance, power, etc.
  • Integrated Environment Management Infrastructure: CETP, STP, solid waste management facility including hazardous waste management, green belts for odour management and pollution control
  • Technical infrastructure: Environmental management cell, quality certification lab, material testing lab
  • Pharma university
  • Integrated township with housing and allied social infrastructure

Source: TSIIC


“Several companies from the US, Canada, France and Germany, besides some Indian companies, have submitted applications seeking land allotment in the proposed Pharma City, amounting to 8000 acres. With an increasing demand, we are on a full swing to expedite the land acquisition process, so that the project can be developed at the earliest,” a senior official from TSIIC, on condition of  anonymity told Express Pharma.

A recent study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and global professional services organisation EY, said that the production cost of pharma products in India is around 30 per cent cheaper than that in the US, while the cost of developing a generic drug is about 50 per cent cheaper. Hence, MNCs are making a beeline for Indian companies in order to gain access to generic drugs being developed by the latter for the US market.

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  • Employment potential: Rs 3.25 lakhs (1.3 lakhs direct employment)
  • Investment potential: Rs 64,000 cr
  • Export potential: Rs 58,000 cr

The officials also noted that they were optimistic about top pharma companies setting up shop in the proposed Pharma City, but never expected the demand to be so high at an early stage.

“We have issued tenders to prepare a master plan for the development of the Pharma City. Though several top-notch international and national firms have submitted bids to develop the hub, Singapore-based Surbana Jurong, was shortlisted,” Rao added.

Officials said that while a few companies from the US have submitted applications to purchase land in the proposed Pharma City, nearly a dozen firms from Germany, France, Switzerland, Canada etc., besides some Indian firms, have already sought land.

In an official statement, multinational pharma company Jlabs has informed that they are exploring the possibility to set up a unit in Hyderabad.

Merck has also expressed its interest to set up a vaccine centre of excellence in Hyderabad, which will impart skill training based on specific requirements by the companies.

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  • Hyderabad Pharma NIMZ proposed over 13,030 acres (52.73 sq.km) of land within the 18,411 acres (74.51 sq.km) of contiguous land proposed Hyderabad Pharma City project.
  • To become ‘Asia’s Biggest Project”

The Telangana government has asked the Industries Department to be in constant touch with these companies and forward their proposals. The department has been asked to expedite the creation of infrastructural facilities in the Pharma City like water, power, internal roads etc.

“With the completion of the proposed Pharma City, Hyderabad will become an important centre for contract manufacturing of pharma products. Pharma marketing companies, which procure their products by third party manufacturing agreements, are now largely dependent on manufacturing facilities in Himachal Pradesh and other northern states of India. The Telengana Pharma City is the first-of-its-kind in South India. Once fully operational, it would reduce this dependency,” Vastrad informed.

Experts cite that big-scale pharma hubs, like Pharma City, are likely to help manufacturers become innovative while being cost competitive. At this juncture, both the aspects are critical for the Indian pharma industry. India can potentially use its cost-competitive manufacturing capability and develop a strong R&D ecosystem using such pharma hubs to stay competitive in the mid to long term.

The US FDA in a written communication recently stated that the proposed Pharma Çity near Hyderabad can be the first of the international clusters it seeks to link scientific and medical advances from across the globe for better healthcare.

Telangana aims to help pharma companies become more cost-competitive against global players, while bolstering manufacturing activities in the sector. This approach offers an effective and sustainable strategy for enabling quality and productivity at a single set-up, which is need of the hour. With a perfect blend of policy, latest facilities, eco friendly and pollution-free clime, the pharma city is on the threshold of becoming a pharma hub not just of the country , but of the world.

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