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The past decade has witnessed the steady growth and commitment of the Government of India in addressing issues such as ‘self-reliance and self-sufficiency’ in all aspects of governance and decision-making. While spin-offs and subsidies were indeed key to many industry and stakeholder interests, key decisions and schemes were missing, until the Center launched a number of ‘Aatmanirbhar Projects’. One such key initiative addresses the need for bulk drug parks in India, making the country less dependent on Chinese active pharmaceutical ingredients (APIs), providing more employment and generating more revenue to contribute to the country’s GDP. A commendable step has been taken by launching three bulk drug projects in three states of the country with an estimated completion time of 5 years. We’ll take a closer look at what the project entails and seek the expert opinions of several industry experts.
The long-awaited bulk drug parks became a reality when the Government of India launched three parks in three states, namely, Gujarat, Himachal Pradesh and Andhra Pradesh. Touted as the ‘Pharmacy of the World’, India’s launch of bulk drug parks has been long overdue for a sector that has largely depended on China for raw materials.
China’s dominance of the active pharmaceutical ingredient (API) market, which is essential for drug development, has forced the government to move quickly to launch drug parks. Furthermore, supply chain issues have been compounded by sudden disruptions due to COVID-19.
A step towards self-confidence
The Department of Pharmacy has received 13 proposals from the State Governments under the Scheme for “Promotion of Bulk Drug Parks’, a key initiative to support bulk drug production, for which the department has passed ‘in-principle’ approval to the proposals of three states, namely, Himachal Pradesh, Gujarat and Andhra Pradesh.
The scheme, with a financial outlay of Rs 3,000 crore announced in 2020, provides financial assistance to three states for setting up drug parks. The parks aim to reduce the cost of manufacturing bulk drugs by creating shared world-class infrastructure facilities supported by the central government and thereby increase the competitiveness of the domestic bulk drug industry.
According to the proposals submitted by these states, drug parks will be established on 1402.44 hectares of land in tehsil Haroli, district Una, Himachal Pradesh, 2015.02 hectares of land in tehsil Jambusar, district Bharuch, Gujarat and 2000.45 hectares of land in KPJ Puram and Kodhada of Thondagi Mandal of East Godavari District, Andhra Pradesh.
The bulk drug parks will provide common infrastructural facilities at one place, thereby creating a robust ecosystem for mass drug production in the country and also significantly reducing production costs. The scheme is expected to encourage domestic production of bulk drugs to reduce import dependency and establish a dominant position in the global market by providing easy access to standard tests and infrastructure facilities.
Work on Gujarat’s first drug park began on October 10, 2022, when Prime Minister Narendra Modi laid the foundation stone at Jambusar in Baruch district. The estimated Rs 2,500 crore project would further boost India’s pharmaceutical growth. The project will play a key role in providing import substitution and help make India self-sufficient in bulk drugs. In 2021-22. In 2008, bulk drugs accounted for over 60 percent of the total import of pharmaceutical products.
On October 13, the Prime Minister laid the foundation stone for the country’s second drug park in Una, Himachal Pradesh. which will be built at a cost of over 1900 crore rupees. It is expected that it will attract investments of about 10,000 million dinars and provide employment for more than 20,000 people. It will also give a boost to economic activities in the region.
In his address at the ceremony The Prime Minister stated that Himachal Pradesh has played a key role in making India the number one drug producer in the world and its capabilities will only increase. “The whole world has witnessed the power of medicines produced in Himachal Pradesh,” Modi added. He further pointed out that now that the raw materials for drug production will be produced in Himachal Pradesh, India’s dependence on other nations will be significantly reduced. “The drug park will give additional strength to the government’s campaign to provide people with quality and affordable medical care,” he pointed out.
Jai Ram Thakur, Chief Minister of Himachal Pradesh, during his recent address to the members of the State Pharmacy Council in Kasauli, mentioned that a drug park in Himachal Pradesh will be a boon for the state. He welcomed the move and was optimistic about how India could become less dependent on China for raw materials. He also noted that the cost of production will be reduced and thus the price of drugs will be reduced.
Andhra Pradesh has received a grant of 1000 crores from the Department of Pharmacy for setting up a drug park at KP Puram and Kodhada villages in Thondangi Mandal, East Godavari District.
objective
India exported pharmaceuticals worth Rs 1,75,040 crore in the financial year 2021-22, including bulk drugs/drug intermediates. Also, India is one of the largest producers of APIs or bulk drugs in the world. India exported bulk drugs/drug intermediates worth Rs 33,320 crore in the financial year 2021-22.
However, the country also imports various bulk drugs/APIs for drug manufacturing from different countries. Most of the bulk import of drugs/APIs done in the country is due to economic reasons.
According to estimates by the Ministry of Health and Family Welfare, in the fiscal year 2020-21, the import of active ingredients was Rs 28,529 crore, while the export was Rs 32,856 crore. The size of the APIs and intermediates market in India is estimated at Rs 96,000 crore in FY 2019-20. According to data maintained by the Directorate General of Commercial Intelligence and Statistics (DGCIS), the volume of API imports stood at 3,90,476 metric tonnes (MT) and exports at 3,24,331 MT for FY 2020-21.
The government is trying to reduce the country’s dependence on imports and to encourage domestic production. The Department of Pharmacy is implementing various schemes and one of the key interventions is the Bulk Drug Parks Scheme to make the country self-reliant in API and drug intermediates.
In April 2021, the Department of Pharmacy launched the Production Linked Incentive (PLI) scheme for bulk drugs, with a financial outlay of Rs 6,940 crore for 53 APIs over six years. TThe PLI scheme for the pharmaceutical sector will improve the affordability and availability of pharmaceutical products.
According to Dr. Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance (IPA), India has over the years lost its advantage in mass production of medicines. China has built its presence thanks to the support it has received in a number of areas, including plant prices, interest rates and electricity subsidies.
He mentions, “Regaining the edge and gaining confidence will be a long-term process. PLI schemes for bulk drugs represent a significant step in this direction. The scheme provides subsidies and creates clusters to develop an ecosystem for wholesale drug manufacturers. These clusters have been very helpful in enabling faster cleanup, efficiency and product development initiatives. API confidence is a global issue and part of a diversified supply chain approach. This has implications for health care safety. India has taken a positive step and is also evaluating options to increase production of intermediate products. This is a much-needed policy initiative that will help the Indian pharmaceutical industry move forward.”
However, the launch of massive drug parks took much longer than the time the government announced it.
Cause of delay
Almost two years have passed since the plan for the establishment of drug parks was officially announced. Girdhar Balwani, Independent Director, Cadila Pharmaceuticals pointing out the probable reasons for the delay in setting up large drug parks, mentions: “Several steps had to be taken in terms of setting up agencies and teams by the central government, such as the Project Management Agency by the Department of Pharmacy, the Scheme Management Board, etc. States had to prepare detailed project reports and submit them to the Department of Pharmacy. Thirteen countries submitted their proposals and they had to be evaluated in detail, especially in terms of financial viability. The Project Management Agency made recommendations to the Department of Pharmaceuticals which were then placed before the Scheme Steering Committee. In principle, approval was given to three countries. Projects that include the installation of common infrastructure facilities should be completed within two years from the date of release of the first installment.
There has been some controversy regarding the drug park in Andhra Pradesh. The government has proposed to set up a drug park on about 2,000 acres at KP Puram and Kodhanda in Thondangi Mandal of KSEZ in Kakinada district. Some activists and politicians have raised some political issues regarding the social and environmental impact on the local communities and coastal ecology of the proposed bulk drug park in the Kakinada Special Economic Zone (KSEZ).
Establishing a high-level board
The Department of Pharmacy has recently set up a high-level committee to monitor the status of major drug parks. The high-level committee is headed by Dr Mansukh Mandaviya, Union Minister for Chemicals and Fertilizers, with Minister of State Bhagwanth Khub as Vice-Chairman and Secretary (Pharms), Drug Controller General of India (DCGI) and other senior officials including industry experts as members. According to a memorandum issued by the government, “the states of Gujarat, Himachal Pradesh and Andhra Pradesh will present the design details, the strategy for selecting industrial units along with the list of bulk drugs to be manufactured in the parks, well before allotment of plots to ensure that through the scheme planned goals of domestic production of critical bulk drugs.”
The memorandum further states that the committee will facilitate alignment of bulk drug park investments with pharmaceutical industry requirements and public health needs. “It will further facilitate technology transfer and other interventions needed to achieve the above objectives,” the memorandum said.
The official, who spoke on condition of anonymity, revealed that the government wants to focus on specific bulk drugs that India imports in large quantities, rather than producing large quantities of drugs that are already available.
the future
Establishing common infrastructure facilities will help reduce the cost of these inputs, especially for small and medium producers. However, these parks must be effectively managed so that the cost of these inputs is significantly reduced.
It seems that the government is trying to lay the foundation stone of drug parks. And with state elections around the corner in various states, the government seems to have hit the right chord with this move. With a number of benefits expressed by pharma analysts/speakers and most pharma companies refraining from commenting, it remains to be seen how these drugs perform in bulk and whether they can collectively take on China when it comes to API production. . Questions related to logistics, manpower, etc. they need to be reconsidered and then only drug parks will be successful in the long run.
Sharing his views on developments, Uddhav Kanoria, Chairman, Anglo French Drugs & Industries said: “Pharmaceuticals didn’t seem to be as high a priority as infrastructure and other essentials. Once the ball is rolling, the government seems to have realized the importance of these things and is moving forward aggressively. Given the renewed focus on pharma and healthcare, especially post-Covid, it seems like a step in the right direction. With the focus of the government and the large pharmaceutical industry in India, there seems to be a huge missed opportunity that will now be tapped. I have high hopes for this.”
However, he estimated that a slightly more transparent and reasonable regulatory regime would have a huge impact on such projects.
Sanjiv Das
sanjiv.das@mmactiv.com
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