The contribution of Gujarat to India’s pharmaceutical and health sectors can be gauged by the fact that this Western State, having only 4 per cent of the country’s population, accounts for more than 40 per cent of medicines manufactured in India.
The State is home to global pharmaceutical behemoth Sun Pharma, and plays host to major players including India’s second oldest drug-maker Alembic, Cadila Healthcare Ltd (Zydus Cadila), Cadila Pharmaceuticals Ltd (CIL), Intas and Torrent Pharmaceuticals. Sun Pharma and Zydus Cadila have a global presence too.
India’s first pharmacy college, L. M. Pharmacy College, was established in Gujarat in 1947, and it offers diploma, degree and master’s programmes.
Gujarat now has 3,637 licensed units engaged in this industry. Of these, nearly 800 are active in direct manufacturing of drugs. Only 20 per cent of these are medium or major manufacturers while 80 per cent are small-scale units. These include 384 units approved by the World Health Organisation’s Good Manufacturing Practice certification (WHO-GMP), and 29 units approved by the United States Food and Drug Administration (USFDA). Besides, there are other allopathic units (2,538), 712 (Ayurvedic), homoeopathic (14) and cosmetics (373). Gujarat has over 1,100 formulation units and 400 bulk drug manufacturing units. The State’s share in national pharma production increased from 22 per cent in 2007-08 to 30 per cent in 2010-11.
The State houses not only units manufacturing diverse products including tablets, capsules, dry syrups, external preparations, cytotoxic drugs, vaccines, small and large volume parenterals, APIs, biopharma products and medical devices but has also emerged a leader in patent applications in India. Various SMEs, research organisations and academic institutions have filed nearly 1,000 patents over the last five years.
Gujarat also accounts for 40 per cent of India’s contract research and manufacturing (CRAM) companies and pharma machinery production each, and 28 per cent of India’s exports in this sector.
Clusters and SEZs
The State’s pharmaceutical industry had registered a healthy growth of 30 per cent in 2011-12 and exported 22 per cent of its products. Gujarat has also seen a 40 per cent growth in contract manufacturing as well as in API industry and 60 per cent in formulation. With 1,361 drugs going off-patent in 2011, generic and other segments are expected to grow exponentially. About 75,000 people are employed in Gujarat’s pharmaceutical industry.
The pharmaceutical industry is concentrated in four clusters of Ahmedabad, Vadodara, Ankleshwar and Bhavnagar. The State has six pharmaceutical Special Economic Zones (SEZs) and as many as 90 pharmacy colleges.
In recent decades, biotechnology has also emerged in a big way. The landscape of Gujarat’s biotech industry features more than 50 biotechnology companies (14 per cent of India’s) and 66 support organisations The thrust areas of the biotech industry in the State include healthcare, pharmaceuticals, agriculture biotechnology, industrial enzymes. bioinformatics, contract research, marine and environmental biotechnology.
Improving Quality
The present annual turnover in biotechnology in Gujarat has been $150-175 million (Rs 700 crore). The Vibrant Gujarat Summit 2011 reported investment intentions of $1.2 billion with 35 MoUs signed between State biotech players and industrialists from abroad and outside Gujarat.
India’s domestic pharmaceutical market size was about Rs 60,000 crore last year, and growing at 15 per cent. The country exports medicines worth about Rs 42,000 crore, including Rs 17,000 crore from Gujarat. India’s pharmaceutical market size is over Rs 1-lakh crore per annum.
Gujarat contributes 45 per cent to this market’s turnover and its export contribution is 40 per cent, official sources informed. To improve the quality standards of the Gujarat-based units, Joshi said the IDSA had launched a three-pronged strategy. For instance, in Ahmedabad’s Vatva industrial hub, with nearly 70 manufacturing units, it formed “Quality Circles”, each comprising a WHO-GMP approved unit and four non-approved ones for exchange of ideas and sharing of experience on how to improve performance.
R. S. Joshi, Executive Secretary to the Gujarat State Board of the Indian Drug Manufacturers’ Association urged the Centre to formulate policies for at least 10 years to enable sustained growth of the pharmaceutical industry. He also wanted all documentation procedures online so that manufacturers can focus on their business rather than waste time in handling paperwork and bureaucracy.
During the last decade, nearly 300 pharma companies of Gujarat either migrated to or set up units in incentive-providing States such as Uttarakhand, Sikkim and Himachal Pradesh. However, with the 10-year tax holiday period coming to an end, many of these are returning to Gujarat.
“These States have other issues as well, such as water shortage and lack of skilled staff. Besides, the possible implementation of Goods and Services Tax (GST) in 2014 will reduce the financial advantage of these States, and increase transportation costs due to frequent fuel price hikes. This will only speed up the return of many of these companies,” said R. S. Joshi, Executive Secretary to the Gujarat State Board of the Indian Drug Manufacturers’ Association (IDSA). The move to tax-holiday providing States had resulted in Gujarat’s contribution to India’s pharma business coming down to 30 per cent from 42 per cent over the last decade. “So, we encouraged the WHO-GMP approved units to focus on exports. We also took delegations to countries like Brazil.” IDSA also arranged group consultancy at affordable fees and then clubbed purchase of laboratory equipment, striking good deals with equipment manufacturers. All this helped upgrade these units and now 90 per cent of Vatva’s pharmaceutical units are WHO-GMP approved.