More than a year after the ‘Make in India campaign’ was launched, pharma manufacturers are divided on its impact. Will the enthusiasm fizzle out or will the sector build up momentum in 2016? A roundup of industry perspectives
‘Make in India’ is gaining momentum but a lot needs to be done
Though the ‘Make in India’ initiative is gaining momentum, the pharma sector is yet to see which new policies will be beneficial for it. However, the Department of Pharmaceuticals (DoP) has outlined some ambitious plans under the ‘Make in India’ initiative. The Ministry of Commerce has also introduced the Merchandise Exports from India Scheme (MEIS) since April 2015 and the subvention of interest for export will help pharma exporters.
Yet, a lot needs to be done to help micro small and medium enterprises (MSME) pharma companies. Firstly, the introduction of bar coding by the Ministry of Commerce and Industry has put a great financial burden on MSME pharma exporters. Secondly, lack of support from the government to improve infrastructure and technical skills of MSME pharma companies has left a big vacuum to match the continuously regulatory requirements of international guidelines. Thirdly, majority of Indian companies, especially the MSMEs, are supplying to public sector undertakings for the domestic market, but their payments get delayed leaving the MSMEs with a financial crunch in their cash flows, ultimately affecting their competitiveness. Fourthly, the Directorate General of Foreign Trade (DGFT) and the Central Board of Excise and Customs are not in sync with each other and a lot of harassment is faced by MSME companies due to this.
I understand ‘Make in India’ is gaining momentum, but a lot needs to be done.
– Nipun Jain, Chief Executive Officer, Pharmchem
‘Govt should be more specific in the concessions being provided for attracting investment’
There is a tremendous opportunity for setting up dedicated pharma plants of global capacity and standards. However, the large multinational companies have grown out of manufacturing and have largely been outsourcing manufacturing activities. It is therefore an opportunity for NRIs looking a India. They can help in promoting the ‘Make in India’ concept of our Prime Minister. With increasing quality standards, not only in the regulated markets but also in semi-regulated countries, the initiative would enable good manufacturing plants in India. It has become the pharma hub of the world with technologically-skilled manpower and the ability to handle regulatory compliance. India therefore will naturally be the right choice for investment in the pharma sector, particularly formulations and R&D.
The government has realised the importance of supporting the API sector but has not announced any specific approach which will enable it to compete with China. The government should be more specific in their concessions being provided for attracting investment. The substantial tax benefit for greenfield projects particularly in R&D activities would attract multinationals. Currently, the MNCs are not favouring R&D activities in India in view of confidentiality and the poor legal system. Even large companies like AstraZeneca have moved their R&D to China from India. The government should take cognizance of the opportunity being lost considering that investments in R&D globally is ever increasing. There are huge opportunities in financing small boutique R&D activities similar to the US module of biotech pharma companies. The Indian market by itself is steadily increasing. The Indian regulatory requirements are also gradually becoming stringent. This will be a good opportunity for sizeable investment into setting up dedicated manufacturing plants of global standards.
– TS Jaishankar, Managing Director, Quest Life Sciences
‘Make in India’ will not be successful without special focus on MSMEs
MSMEs are considered the backbone of any country, it supports the nation in its economic growth. India also has a great pride in its industrial growth, which is aided by MSMEs. Unfortunately, MSMEs, particularly in the pharma category, has not been treated well. Otherwise this segment has the potential to do wonders.
I feel that the below mentioned factors obstruct the growth of the industry. If the government was so keen in launching the ‘Make in India’ campaign then they should have considered the following problems and planned some strategies to overcome them, otherwise it is a futile exercise.
A) Earlier licencing was simple and with the introduction of schedule M it became an expensive exercise which forced many units to shut down
B) Later Schedule ‘L’ was introduced which again became a financial burden on small and medium scale units, resulting in inviolability
C) Now the government is talking of upgradation to WHO compliance, which will practically not be possible to afford without a huge investment
D) We are hearing of upgrading units to Pharmaceutical Inspection Co-operation (PICs) compliance and bring them to the international level. In addition to this, the government proposes to introduce Good Distribution Practice, Goods Engineering Practice, Good AHU Practice etc. All these are going to add to the financial burden on the small scale sector
E) As a result of compulsory bar coding on pharma packaging, the pharma industry is going to face another financial burden, resulting in non-profit making units. Across the globe, there are very few countries practicing it.
F) Fixed dosage combinations is another area where the industry is seeing a challenge. Various state governments have granted permission to small scale units and those combinations are in the market for more than a decade, without registering any side effects. Such combinations can be regularised and guidelines for future can be given. Such matters are pending in the court, these delays cause wastage of money and time for the industry as well as the government.
Our Prime Minister’s vision of ‘Sab ka Saath, Sab ka Vikas’ will be completed only when the small scale industry is also taken into consideration. The players in this sector need to be motivated to contribute to this journey. Let all of us think about the betterment of our nation. The PM’s ‘Make in India’ initiative will not be successful unless special focus is given on the MSME sector.
– BR Sikri, Co-Chairman – FOPE, Vice chairman – IDMA, Vice-President – IDMA, Vice Chairman – CIPI
‘We look forward to partnering with the government to bring about a healthy India and an innovative India’
There is indeed a potential for the ‘Make in India’ programme to improve the industrial and economic landscape of India. During a New Delhi visit in November 2015, Ken Frazier – Chairman and Chief Executive Officer, MSD, observed that Prime Minister Modi’s ‘Make in India’ programme would be strengthened by the country’s capacity for healthcare innovation. This is critical to meet patients’ growing health needs and to enhance economic competitiveness. A robust, innovation-friendly eco-system that enables technology transfer, stimulates research, helps create an advanced healthcare system and provides access to new medicines and innovative therapies will encourage foreign direct investment (FDI).
Rising incomes in India have led to longer life expectancy, but increased life-style related diseases that pose a huge challenge to our healthcare system. Innovation helps cure diseases that were once incurable and OPPI member companies continue to bring the fruits of their research for the benefit of patients in India. Right now, PricewaterhouseCoopers (PwC) is assessing the innovation landscape in the pharma industry to suggest policy recommendations that will enable Indian companies to move up the innovation value chain. Their initial findings highlight the need to strengthen four pillars of innovation: health infrastructure; financing; human resources; and legal, IPR and regulatory systems. Strengthening these areas will help create an environment that is conducive to innovation and attract FDI. We look forward to partnering with the government to bring about a healthy India and an innovative India!”
– Ranjana Smetacek, Director General, OPPI
Make in India campaign is certainly a welcome move
Indian pharma has seen substantial growth in last many years inspite of all odds. The pharma sector has to adhere totough regulatory norms, in the current times, the regulatory norms are getting stringent day- by-day. India has emerged as a strong player with its in-depth knowledge of science and documentation. Outside the US, India has the maximum number of US FDA approved facilities, along with the largest DMF filing.
The current ‘Make in India’ campaign is certainly a welcome move to our industry, as it will boost the image of the Indian pharma industry worldwide. Today, apart from quality and GMP, brand image has a huge contribution towards acceptance and growth. ‘Make in India’ will definitely provide an edge to mid-sized players while small players need hefty investments to leverage the opportunity. Ideally, small companies can become the ancillary units to large players and extend support, This will help to sustain and grow as well. Today, by and large, all mid-sized group will have decent infrastructure and manpower to grow to the next level. Companies have updated themselves with respect to all regulatory requirement as per their focused markets. Bal Pharma has been a well recognised player in the Indian/ global pharma industry with five strong manufacturing units of FDF and API. While API is already catering to regulated markets like Europe, Japan, Canada, Australia, Korea; FDF unit is in the pipeline to go through the regulatory audits. The company is regularly investing to upgrade and stay up to date with cGMP requirements. We would like to leverage the opportunities offered by the ‘Make in India’ campaign as we aspire to grow multi-fold in the coming years.
– Archana Dubey, Vice President – Exports, Bal Pharma
‘Make in India’ will gradually prove to be a boon for Indian pharma cos
“In my opinion, the ‘Make in India’ initiative will slowly and gradually prove to be a boon for Indian pharma companies. India is the third largest market for pharma globally and India exports 20 per cent of the global generic pharma products. In the past years, a couple of reasons have been responsible for the drop in exports. These include delayed regulatory approvals and depreciation in the currencies of the emerging markets. Indian companies need to give importance and maintain strict GMP standards for manufacturing.
At present, India is totally dependent on China for 12 most important active ingredients used in the pharma sector. India imported APIs worth $3.9 billion in 2014-15, of which China accounted for $3.3 billion. To reduce this dependence on China for APIs, the government is planning to provide incentives to both state-run and privately-owned companies to produce the active ingredients.
As far as MSMEs are concerned, there are very few incentives for manufacturing in the pharma sector. I feel that even when the government is trying to boost the ‘Make in India’ initiative by introduction of incentives, schemes etc. the whole change will require time and active participation of the manufacturing pharma giants.
– Suresh Pareek, Managing Director, Ideal Cures