Union government’s Make in India programme is just a mirage for the small and medium pharma companies because drug manufacturing is capital intensive activity. Instead the sector is grappling with rigid price controls and ban on fixed dose combination (FDC) issues, said Anjan K Roy, founder, RL Fine Chem.

Indian pharma accounts for around 19,000 production units, of which 90 percent are micro small and medium enterprises (MSMEs), the backbone of the sector. Although Make in India was unveiled in 2015, the sector’s challenges span from stringent regulatory approvals, delayed environment clearances and higher input costs with GST implementation from July 1, 2017. All these are making it difficult for MSMEs to survive, he added.

Even if companies have received the regulatory clearances to manufacture, generic drugs are now under the ambit of price control . This has led the SME sector to opt for acquisitions and strategic alliances, noted Roy who recently hived off 70 per cent of his company’s stake to Chandrapore Estates and MAPE Advisory Group and went on to acquire 42.5 per cent share of the Hyderabad-based Lee Pharma.

Now the ‘Make in India’ objective is to boost GDP and tax revenues, by manufacturing products that adhere to highest quality standards and reduce environment impact. This call for capital investments and regulatory clearances both of which are not easy to come-by, he said.

The government has been making big announcements on the Pharma Park. In Karnataka too, various locations were recommended but nothing materialised. Instead MSMEs have resorted to set up plants on their own. For instance, RL Fine Chem has invested Rs. 80 crore to set up its fourth advanced API unit complaint to US FDA norms.

The government’s intent with ‘Make in India’ was to sustain and enhance the Image of MSMEs and the large pharma companies in the international arena the should have been Common Effluent Treatment Plants (CETPs) in existing industrial parks. Instead the companies are forced to invest in zero liquid discharge technology. Even after this, the required environmental clearances are cumbersome and time-consuming. Moreover if an industrial area located between two State boundaries, the production plant will need to be approved from both the government authorities.

Another fact is that Central Pollution Control Board insists on online monitoring system. These need to be imported and the government has not made efforts to encourage tech transfer pacts for indigenous manufacture of this equipment during its bilateral trade discussions. Even in the case of hazardous waste, collection and transportation is expensive. These issues deter the companies to even invest even as they are under pressure to keep pace with the technology advancements and plant automation.

Source: pharmabiz