Regulatory standards, a major challenge for Indian pharma industry

Industry leaders expressed concern over the volatility in currency market and struggle faced by Indian drug makers in the European Union market

By Sai Nikesh D

The Indian pharmaceutical sector has to face many challenges due to issues related to regulatory compliance and international trade negotiations, say industry leaders.

In the new Foreign Trade Policy, the government has taken several steps to improve the pharma sector.

A fund of Rs.50,000 crore has also been allocated for improving regulatory standards. “However, issues relating to regulatory standards are posing challenges,” said K Satish Reddy, Chairman, Dr Reddy’s Laboratories Limited.

Speaking at the Pharma CEOs Conclave 2015 in Hyderabad on Wednesday, Reddy said that there is a need for a better coordination between the government and the industry to resolve these kinds of issues.

“Few challenges also exist in case of India’s global-level trade negotiations. But these negotiations are important for the Indian pharma industry as they offer better market access along with an opportunity to upgrade self-standards, especially for the Small and Medium Enterprises(SMEs), on par with global market requirements,” he said.

The event organised by the Pharmaceutical Export Promotion Council of India (Pharmexcil) was focused on ‘Present Challenges-Preparedness of Industry’.

The industry leaders expressed concern over the volatility in currency market and struggle faced by Indian drug makers in the European Union market.

Recently, the European regulator has imposed a blanket ban on more than 200 generic drugs made in Indian laboratories. The move prompted the Indian government to suspend talks over the proposed free trade agreement with the 28-national bloc.

The growth of pharma industry stands at $1.03 trillion, and by 2018, the industry is expected to grow 5-6% to reach $1.3 trillion, said Reddy citing the IMS data.

The growth rate of Active Pharmaceutical Ingredient (API) in August was 14% and the segment is expected to grow 19% in the next four-five years to reach $40 billion.

Apart from general regulators, there is a need for “specific regulators” to address quality and regulatory concerns, said Akul Sabarwal, Director General (DG), Drugs Control Administration (DCA), Telangana.

Siva Kumaran, Director, Aurobindo Pharma Ltd, said, “India exported $25 billion worth pharma products last year, while the domestic consumption was around $12 billion. Currently, the Indian pharma industry is continuing with a growth rate of 16%.”

However, new guidelines by the US Food and Drug Administration (USFDA), especially in case of quality matrix, Field Alert Reports (FARs), Market Recall, among others, pose serious challenges to the Indian pharma industry, he added.

Rajiv Nannapaneni, VC & CEO, NATCO Pharma Ltd, said, “Lack of proper infrastructure and special support system for APIs” are the major challenges faced by the Indian pharma industry. He also suggested the setting up of industrial estates and special zone for APIs.

“Need of the hour is to promote SMEs. In countries like Germany, major contribution is being held by the SMEs in terms of overall production. Taking this as an example, India should promote its largely-available spread SMEs to boost the domestic industry,” he added.

Sudanshu Pandey, Joint Secretary, Department of Commerce, said the industry should look for new markets to enhance the international trade.

“India should start looking for partnerships with countries like Japan, which has been a missing factor since the past. It is noteworthy that Indian government has requested Government of Japan to set up its Pharmaceuticals and Medical Devices Agency (PMDA) in India, which would benefit Indian industry a lot,” Pandey said.

The government is also negotiating with the Korean industry, he said, and urged the pharma industry to come up with innovative ideas and suggestions to improve ties.

During the event, the Export-Import Bank of India (Exim Bank) released a working paper which covered various challenges and opportunities faced by the pharmaceuticals industry. “This paper would definitely help the government in identifying and resolving key concerns of the Indian pharma industry,” said A Subrahmanyam, Deputy General Manager and Regional Head, EXIM Bank, Hyderabad.

This article was published in The Dollar Business on September 24, 2015

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