Export of Pharmaceutical Products from India An Analysis of Compliance Issues Faced by the Industry

A Managing Global Compliance in Exports Assignment

Submitted By:

Ankit Gupta 8A

Mohit Narula 24A

Prathyusha 32A

Sonali Yadav 41C

Balu G 14B

Mitul Jain 22C

Neha Deoliya 24C

Rohan Raghavan 31C

Shailesh Kumar Nirala 36C

Contents The Indian Pharmaceutical Sector ............................................................................................. 3

An Analysis of NTBs .................................................................................................................... 7

Strategies for Improving Exports ............................................................................................. 17

References ............................................................................................................................... 20

The Indian Pharmaceutical Sector

MARKET SIZE

The Indian pharmaceutical market is approximately $18 billion in size (McKinsey &

Company, 2013). It has grown three times since 2005, from around $6 billion in that year. It

is poised to be the sixth largest in the world by 2020. The rise of pharmaceutical outsourcing

and investments by multinational companies (MNCs), allied with the country's growing

economy, committed health insurance segment and improved healthcare facilities, is

expected to drive the market’s growth.

India is today one of the top emerging markets in the global pharmaceutical scene. The

sector is highly knowledge based and its steady growth is positively affecting the Indian

economy. The organised nature of the Indian pharmaceutical industry is attracting several

companies that are finding it viable to increase their operations in the country.

The Indian pharmaceuticals market has characteristics that make it unique. First, branded

generics dominate, making up for 70-80% of the retail market. Second, local players have

enjoyed a dominant position driven by formulation development capabilities and early

investments. Third, price levels are low, driven by intense competition. While India ranks

tenth globally in terms of value, it is ranked third in volumes. The Indian pharmaceutical

industry accounts for about 1.4 per cent of the global pharmaceutical industry in value

terms. The industry has over 60,000 generic brands across 60 therapeutic categories and

manufactures more than 500 different active pharmaceutical ingredients.

MARKET DYNAMICS

The domestic pharmaceutical market has reported total sales of $ 1.12 billion in the month

of July 2013, a growth of 13.5 per cent (IMS Health, 2013). The major factors responsible for

this growth are increasing sales of generic medicines, continued growth in chronic therapies

and greater penetration in rural markets.

India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs),

Finished Dosage Formulations (FDFs), Bio-Pharmaceuticals, and Clinical Services across the

globe. The exports of pharmaceuticals from India grew to $14.6 billion in 2012–13 from

$6.23 billion in 2006–07, registering a compound annual growth rate (CAGR) of around 15.2

per cent. The Ministry of Commerce has set a target for Indian pharmaceutical sector

exports of $25 billion by 2014 at an annual growth rate of 25%.

Among the top pharmaceutical companies, Abbott with total sales of $73.67 million, Cipla

with $52.48 million, Sun Pharmaceutical with $51.02 million, and Zydus Cadila with $43.69

million were the fastest growing companies in the month of September 2013. In terms of

growth, Sun Pharmaceutical (17.8 per cent) is ahead of peers such as Cadila (1.8 per cent),

Cipla (0.8 per cent) and McLeod (0.7 per cent).

STRENGTHS OF THE INDIAN INDUSTRY

Finished generics supplied from India account for 20% of the global generics market. It is

estimated that 70% of the patients belonging to 87 developing countries received medicine

procured from India by the United Nations Children’s Fund (UNICEF), International

Dispensary Association (IDA), the Global Fund and the Clinton Foundation.

As per WHO data and Pharmaceutical Export Promotion Council (Pharmexcil) research more

than 90% of Active Pharmaceutical Ingredients (API) approvals for Antiretroviral (ARVs),

Anti-tubercular & Anti-malarials (WHO Prequalified) are granted to India. Of the total of

4,942 prequalified approvals granted by WHO as on Jan, 2009 to 12 countries, India has 3rd

highest number of approvals (621) for 6 companies. It also has the highest number of

approvals from US President's Emergency Plan for AIDS Relief (PEPFAR).

EXPORT OF INDIAN PHARMACEUTICALS

The pharmaceutical sector is unique in that exports constitute about 50% of the total

turnover of the industry. A substantial portion of this export is to regulated markets which

have high quality standards. Therefore exports of pharmaceutical products have a very large

contribution to make to the revenues and jobs created in the sector. Further, to cater to the

export markets, pharmaceutical industry has had to imbibe global best practices and

combine them with the cost competitiveness of domestic industry. Thus the export of

pharmaceuticals has been the major driver of growth and success of this industry.

While the pharmaceutical industry and its mother sector, chemicals, has a number of large

manufacturers, it is dominated by small industry. To ensure that the industry flourishes it is

important to preserve and enhance the competitiveness of the small & medium enterprises.

This can be done by policies and incentives which promote consolidation and help

emergence of large players while at the same time providing common facilities and

infrastructural support for clusters to make small units thrive.

Indian pharmaceutical companies are capitalizing on export opportunities in regulated and

semi-regulated markets. The Ministry of Commerce targets to export $25 billion worth of

pharmaceuticals in 2016. India is the largest provider of generic medicines across the globe;

India’s generic drugs account for 20 per cent of global generic drug exports (in terms of

volumes). In terms of value, pharmaceutical products exports have increased at a CAGR of

26.1 per cent to $10.1 billion during FY06–13. During the same period, pharmaceutical

products imports rose at a CAGR of 25.4 per cent to $1.8 billion.

List of countries importing pharmaceutical products from India (SOURCE: www.trademap.org)

Trade data from the Indian pharmaceutical industry (in USD billion) (SOURCE: Dept. of Commerce)

CHALLENGES

Some of the major challenges include:

Lack of world class R&D infrastructure and absence of Government support for

drugs related to R&D

Poor funding for drug discovery with emphasis on reverse engineering rather

than innovation

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United States of America 971730 1170144 1674983 2349165 3020734

Russian Federation 336316 262025 293109 531457 488527

United Kingdom 200107 236292 281478 364084 352501

South Africa 192159 189965 253950 317588 319835

Nigeria 182190 167619 177563 257846 276161

Germany 103189 102009 157952 191932 234377

Kenya 113057 90570 155748 200629 229128

Netherlands 72440 77041 121238 166562 166331

Ghana 61477 82130 122282 134228 165378

Ukraine 149859 107667 122253 131923 164942

Weak chemicals base with over-dependence on import of large proportion of

bulk drugs from unreliable sources like China. High cost of finance for long term

capital requirements and working capital

Absence of quality infrastructure with assured power supply and common

facilities like effluent treatment and hazardous waste disposal

Storage and infrastructure bottlenecks at ports, airports, etc.

Lack of resources for promotion of products and brands due to large number of

brands being owned by medium and small enterprises

Heavy dependence on China for imports of bulk drugs is a major challenge which

Indian pharmaceutical industry faces. 40% of our API requirements are imported

from China. Certain sectors like fermentation which require cheap and abundant

power have almost completely migrated to China

The non-tariff regime in the domestic chemicals and pharmaceutical sector is

very weak and needs to be built up

Industry does not enjoy a reputation of high quality.

An Analysis of NTBs

In the interest of safety, efficacy and affordable medicine to the general population every

country in the world regulates pharmaceutical industry in their respective countries. The

regulation is all pervasive from price controls to reimbursement of pharmaceutical expenses

to the consumers through national health protection/insurance schemes to drug

registration, market authorization, quality control, quality standards, imports & distribution,

packaging & labelling, intellectual property and even mergers and acquisitions in some

countries

1. Multiple Approvals by Various Drug Regulatory Authorities

The multiplicity of drug approval agencies in various countries such as US FDA, UK MHRA,

the European Medicines Agency (EMEA), European Directorate for Quality Medicines

(EDQM), Ministry of Health, Labor, and Welfare (MHLW), Japan, The World Health

Organization (WHO), Therapeutics Goods Administration (TGA), Australia, MCC, South

Africa, etc. has raised drug registration costs and site inspections costs. These regulatory

agencies insist on pharmaceutical standards & quality procedures of their country, which

often varies from country to country.

2. Mutual Recognition Contracts

Many countries including, EU, USA, Canada, Japan, etc., also have concluded mutual

recognition agreements with countries with equivalent levels of GMP and registration

standards. These agreements are meant to assure the quality of drugs imported into

country issuing market authorization through mutual acceptance of GMP inspection results

and exchange of information on drugs distributed in the two countries. However, India is

not signatory to many of these mutual recognition agreements hindering the exports of the

country’s exports.

3. Documentary Requirements

The documentation to register drugs is extremely detailed and often is very expensive to

provide such dossiers such as DMFS or ANDAS, etc. The review procedures of such

documentation are very stringent and do not permit any low cost approach. The complete

process details, site plans and all intricate details are demanded and have to be provided.

This not only costs lot of money but also provides a free access to knowledge to employees

in such agencies which diffuses into their systems. India on the other hand offers very little

or almost no such restrictions making it easy for foreign manufacturers to enter the country.

Our documentation reviews, inspections, etc., are meant to enhance the access of

importation

4. Bioequivalence Studies for Generics in Local Populations – An Emerging Technical

Barrier

Japan, Mexico and now Thailand, etc., want the bioequivalence to be studied in their local

populations in their countries. A bio-equivalence study merely compares the drug levels as

compared to the original drug in-vivo. There is no clinical efficacy evaluation. Indian exports

will suffer extensively if this technical barrier is adopted in more countries. US, Canada,

Europe, South Africa, Australia and various countries accept BE studies conducted in India as

per International guidelines. As each additional BE study costs more than Rs.50lacs for each

additional country, this new NTB can adversely effect the product exports.

5. Drug Registration Fees

Countries in European Union charge exorbitant fees for granting drug registration and

approvals. This is so even with countries such as Japan, Russia, South Africa, Australia,

Singapore, etc. This is in sharp contrast with USA which does not charge any such fees for

filing DMFs & ANDAs. While a few countries of Europe seek the fees after due examination

of the applications, many countries require the payment of fees in advance.

6. Reference Standards

Many countries insist on innovator standards of their countries. This is to say that Japan

accepts reference standard of innovator product registered in Japan, Brazil accepts

reference standard of innovator product registered in Brazil and so on. This implies to

register a generic molecule such as paracetomol in a country such as Japan or Brazil, we

have to obtain reference standards of paracetamol of the innovator company registered in

Japan or Brazil. Often this places additional difficulties on exporters to obtain reference

standards of different countries.

7. Requirement for Local Presence

Japan requires tie-up with a local manufacturer or distributor for registration as also clinical

trials for bio equivalence studies (from three batches) in Japan which turns to be very

expensive.

8. Participation in US Government Business

The U.S. continues to be an attractive market for Indian firms, despite the challenges of

price erosion and inability to bid for government purchases. India is widely perceived by

lawmakers and business groups in Washington as a serial trade offender, with U.S.

companies unhappy about imports of everything from shrimp to steel pipes they say

threaten U.S. jobs. This is a case of IPR violation that is being labelled by the USA.

9. Drug Regulatory Information Availability

Information availability in African countries is a major problem as many of these countries

provide them in their local languages. This holds true with many European, CIS, LAC, Asean

and other countries also. In the absence of websites in English language, information on

drug registration, registrations granted, markets, etc. is not freely available to Indian

exporters

10. Registration and Certification

Registration barriers are possibly the most common barrier to affect the sector. Despite the

existence of the International Conference on Harmonisation of Technical Requirements for

Registration of Pharmaceuticals for Human Use (ICH) and efforts to harmonise regulatory

requirements consistent with ICH guidelines, registration requirements vary significantly

from country to country. These can be for historical and/or cultural reasons, including some

countries' traditional approach to ensuring their public health standards. Several key

markets of significant importance to the pharmaceutical industry have regulatory

submission requirements that diverge from ICH guidelines.

In addition, some third countries have introduced potentially excessive requirements to

obtain certificates or other documentation to allow importation. Such requirements may

include additional and unnecessary steps in order to submit a Certificate of Pharmaceutical

Product, which is a WHO recommended process to help countries assess the quality and

authenticity of an imported product, prior to any domestic registration and authorisation

process. The CPP is particularly important for EU companies seeking Marketing

Authorisation (MA) in certain countries in the Middle East, Asia, South America and Africa.

Other barriers may involve customs control measures such as examination, testing of

individual products batches, and temporary storage (sometimes inconsistent with

appropriate supply-chain security, which may effect the stability of products).

11. Clinical Trials

Clinical trials are one of the most cost intensive factors in developing a new medicinal

product. Therefore, the protection of clinical trial data is an important element in the

pharmaceutical sector. Art. 39.3 of the TRIPS agreement oblige WTO Members to protect

such data against unfair commercial use and disclosure. In addition to inconsistent

regulatory approval requirements, the industry also faces varying requirements for clinical

trials approval in key markets around the world which are inconsistent with ICH standards.

These requirements are often out of step with scientifically proven standards. In many

countries, the industry face requirements for local patients in global trials (even if not

scientifically required), and in some countries, an applicant must conduct a local clinical trial

prior to submission of a new drug application. There is no perceived benefit to conduct local

trials in addition to global trials and this requirement delays significantly the introduction of

new medicines in a market. Furthermore, most countries (notably EU, US, Japan) accept

global clinical trial data in line with ICH Guidelines.

Example: Japan

The Japanese Good Clinical Practices rules are not fully in line with ICH guidelines. Foreign

clinical studies, even when accompanied by adequate bridging data are not accepted.

Example: China

Local clinical trials are required prior to initiating registration of products in China, resulting

in the repetition of some clinical stages for pharmaceuticals and even the full development

programme for vaccines. This is not in line with international standards and can involve one

to five years delay in approval and marketing of products.

Example: Russia

The new federal law on medicines circulation introduced a requirement to conduct clinical

studies in Russia as a prerequisite for registration and access to the domestic market. This is

contrary to the global research and development practices and to international scientific

standards (e.g., ICH), impeding market access.

Example: Japan

Despite progress in recent years in the specific fields of vaccines and biologicals, there is still

a 'vaccine gap' between Japan and other industrialized countries. Specifications and

minimum requirements of biological products (MRBP) are different from global ones. There

are differences in standards and testing methods in Japan as compared to the rest of the

world, meaning that overseas vaccines for routine immunization cannot be registered in

Japan without adjustments to conform to MRBP and JPh.

Japan's drug penetration restrictions rule requires that for the first year that a new product

is marketed, patients can only receive a 14-day prescription, resulting in an unnecessary

expense to the patient and to the manufacturer as packaging of some products will need to

be completely changed for Japan. This rule also does not take into account medicines that

have no obvious effect for the first 14 days of consumption

Example: Brazil

There are significant market authorization delays in Brazil, which are now significantly

higher than the standard average length of 12 months for such approvals. Conversely, there

is a specific issue with regards to bio-similar molecules, with suggestions that Brazil does not

always reinforce its authorization practices, leading to inadequate testing of complex

substances and introduction on the market of less safe products, originating in third

countries. This could result in a competitive disadvantage to EU pharmaceuticals, which

undergo thorough testing procedures.

Specific Non-Tariff Barriers in Various Countries and Regions

1. Quality Standards - South Korea

Imposing the proprietor of pharmacy to keep and retain sales record of prescription drug

where the Separation of Prescription and Dispensing is exempted, Authorizing Clinical

Investigation Institute, Non Clinical Laboratory and Biological Equivalence Testing Body,

Introduction of Drug Master File System, Imposing KFDA to meet applicant for approval for a

drug with written request for a meeting, Treatment use and Emergency use of an

investigational new drug, Alleviation requirements of quality manager of quasi-drug

manufacturer, License Drug Importer, Establishing Joint Drug Distribution Centre. To

improve the drug regulatory system for quality assurance, strengthen the sale management

of prescription drug in the exempted area for the Separation of Prescription and Dispensing,

established the joint drug distribution centre and otherwise to reinforce inadequate

regulations.

2. Human Health & Safety - United States of America

The administration is proposing to amend certain regulations of the Current Good

Manufacturing Practice (CGMP) Regulations for finished pharmaceuticals. These

amendments would clarify certain manufacturing, quality control and documentation

requirements and would ensure that the requirements regulations more accurately

encompass CGMP. In addition, the agency is updating the requirements for process and

methods validation to incorporate guidance previously issued to industry and to reflect

current practice.

3. Human Health - Peru

The notified draft regulation contains 175 articles and 8 transitional and final supplementary

provisions addressing technical aspects of the manufacture, production, control, import and

export of pharmaceutical and related products with a view to entry in the Registro Sanitario

(Sanitary register), as well as the control and sanitary surveillance of the products covered

by the regulation.

4. Health & Safety - Argentina

This resolution establishes the substance ciprofloxacin hydrochloride, packaged in vial-

ampoules containing approximately 300 mg each with a titre of 99.9%, as a reference drug

for physic-chemical tests. Protection of human health.

5. Technical Regulations/Standards - South Korea

Harmonization of standards relevant to the screening on the safety and efficacy of

pharmaceutical products - obligation of officers involved in clinical studies; protection of

human rights in clinical studies; strengthening of review body

6. Consumer Protection and Safety - Honduras

The technical regulation establishes the minimum requirements governing the labelling of

both Central American and foreign pharmaceutical products for human use, irrespective of

the terms and conditions of sale, shipping or supply. Prevention of practices likely to mislead

or deceive the consumer.

7. Human Health - Japan

Under the provision of Article 41 of the Pharmaceutical Affairs Law, Ministry of Health and

Labour and Welfare revises the Japanese Pharmacopoeia fifteenth edition.

8. Human Health and Safety - European Communities

Proposal to amend the Community Code for medicines for human use, in order to address

the risk of falsified medicinal products entering the legal supply chain. The proposal

addresses also issues of API quality and compliance with good manufacturing practices. A

summary of the proposed amendments is set out in the explanatory memorandum

accompanying the proposal.

9. Consumer Health - Brazil

This draft technical regulation establishes the standardized terminology for pharmaceutical

dose forms to be used on labelling, packaging, package inserts and register process.

10. Human Health and Safety - Malaysia

The control of API will be incorporated into the product registration. The amendment

prescribes the mandatory requirement for the industry to submit the required technical

documentation pertaining to each active pharmaceutical ingredient as part of product

registration requirement. It is applicable to all active pharmaceutical ingredients.

11. Harmonization with International Standards - South Korea

Establishing safety standards of medication containers and packages to prevent medication

incidents of children. To stipulate detailed provisions in the Enforcement regulation, as

entrusted by Pharmaceutical Affairs Act promulgated on 27 January 2005.

12. Safety - Mexico

The purpose if this Mexican Official Standard is to establish the criteria and requirements to

be observed in conducting tests to demonstrate the interchangeability of generic drugs. The

standard is mandatory in Mexican territory for all establishments requesting the registration

of interchangeable generic drugs.

13. Human Health - China

To regulate and supervise the whole process of production and quality management of

pharmaceutical products.

14. Human Health and Safety - United States of America

The administration is modifying a proposed rule that proposed to amend the general

labelling policy for over-the-counter (OTC) drug products to allow for interchangeable use of

the terms “drug interaction precaution”, “avoid mixing drugs”, or “do not mix drugs” in

labelling required by an OTC drug monograph. This modification provides for one additional

alternative term, “do not use with ***”.

15. Human Safety - United States of America

The Food and Drug Administration (FDA) is proposing to amend its new drug and biological

product regulations to identify the information needed to provide substantial evidence of

the efficacy of new drug and biological products used to reduce or prevent the toxicity of

chemical, biological, radiological or nuclear substances. This proposal would apply when the

traditional efficacy studies in humans are not feasible and cannot be ethically conducted

under FDA’s regulations for adequate and well-controlled studies in humans.

16. Certification - Japan

Under the provision of Article 14, paragraph 1 of the Pharmaceutical Affairs Law, the

Minister of Health and Welfare designates drugs, which do not require individual ministerial

approval for manufacturing and import. The Ministry of Health and Welfare will revise the

designation to expand the coverage of drugs.

17. Labelling - Japan

1. Standard for the warning labelling on packages of pharmaceuticals whose shape

or appearance could lead to medication errors.

2. Standard for the labelling on packages of pharmaceuticals for the easy recognition

of the labelling.

3. Standard for product names of pharmaceuticals to avoid confusion among

different product names and their abbreviations.

(These standards are not mandatory but voluntary)

18. Human Health - Switzerland

Introduction of complementary controls for batches of products imported in Switzerland.

19. Technical Regulations/Standards - Japan

To amend the testing methods for biological products to be harmonized with the Japanese

Pharmacopoeia, the WHO standards, the U.S. Pharmacopoeia, and others.

20. Human Health and Safety - United States of America

The Food and Drug Administration (FDA) is proposing to amend the final monograph (FM)

for over-the-counter (OTC) bronchodilator drug products to add additional warnings (ex: an

“Asthma Alert”) and to revise the indications, warnings and directions in the labelling of

products containing the ingredients ephedrine, ephedrine hydrochloride and racepinephrine

hydrochloride. This proposed rule is part of FDA’s ongoing review of OTC drug products.

Protection of the human health.

21. Human Safety - Canada

This initiative establishes a regulatory framework for abbreviated new drug submissions.

The amendment provides a definition for a Canadian reference product thereby providing

manufacturers and consumers with a clearly defined standard. This regulatory initiative also

defines specific requirements for an abbreviated new drug submission.

22. Human Health and Safety - Brazil

This draft Technical regulation has the objective to establish requirements to post-

registration modifications of active pharmaceutical ingredients (API) registered in Brazil

used in the product and/or commercialization of medicines in the country.

23. Human Health and Environmental Protection - France

This notified draft decree sets forth arrangements for the collection of unused medicinal

products returned to pharmacies by patients, and specific procedures for the disposal of

such products. The text describes procedures for the collection (provision of special

containers, transportation) and disposal of unused medicinal products, the cost of which is

borne by the pharmaceutical companies dealing in such products, in application of the

principle of extended producer responsibility. The text states that unused medicinal

products must be disposed of by incineration and provides that companies may fulfil their

obligations by joining a collective scheme approved by the government authorities, on the

basis of a set of specifications, the terms of which may be clarified, if necessary, by order.

24. Quality Standards and Safety - Japan

Minister for Health and Welfare establishes a quality and safety assurance system (Good

Tissue Practice) for cell and tissue products and revises some parts of the related ministerial

ordinance.

25. Human Health - Argentina

Establishes mandatory declaration of ethyl alcohol content in prospectuses/information

about medicines containing it.

26. Latin American Countries

Most of Latin American Countries (LAC) do not provide clear cut guidelines for drug

registration or at least these are not available in public domain imposing avoidable hurdles

on the manufacturer exporters seeking entry into these countries. For example check list of

quality & efficacy tests, documents is not available in most of the Latin American Countries

barring Brazil. Indian exporters in the absence of these check lists come to be aware of

many requirements after submission of dossiers resulting in queries and resubmissions. To

take a specific example, the specifications for drug registrations such as shelf life, stability

tests, etc. are not available in public domain. Similarly, clear cut timelines or ‘clock stops’ for

registration processes is also not available with many Latin American countries. Colombia on

the other hand has clearer guidelines and also insists on cGMP inspection of the sites. The

country also does not insist on cGMP inspection and accepts valid recent inspection and

approval certificates issued by a few other countries such as US FDA.

27. Commonwealth of Independent States

In Commonwealth of Independent States (CIS) countries, the queries raised during the

registration & approval process vary from reviewer to reviewer. The standards in these

countries also vary and it takes practically as long as 2 years for drug registration in these

countries. The testing procedures in these countries are also long. Batch tests are

performed before acceptance of documents for approval and again batch test are

performed after review of submitted documents. Drug registration fees are also high in

these countries. Only Ukraine has site inspections for cGMP while many other CIS countries

do not insist on the same

28. Africa

Many African countries insist on labelling and indications on the products in local languages.

Many of the West & North African countries, numbering around 20, which are former

French colonies and having substantial presence of French manufacturers, insist on

indications to be printed in French language. Further many African countries do not want to

promote imports of pharmaceutical products that are manufactured domestically as a

measure of protection to domestic manufacturers or a measure to save foreign exchange.

This restricts the trade in these products in those countries.

29. European Regulation of ‘REACH’ - an Emerging Barrier

The recent promulgation of ‘REACH’ regulation by EU has very deep impact on Indian

exports of drug intermediates in particular and chemicals in general to Europe. The

regulation not only adds to the cost of Indian manufactures making them uncompetitive but

also poses several non-tariff barriers. The pharmaceutical SMEs and traders in drug

intermediates may find it difficult to access European markets. Many other countries such

as USA, Canada, Australia, etc., are also undertaking exercises to introduce similar

legislation

30. Miscellaneous Barriers

Many small countries insist on attestation of all test certificates, export documents by their

diplomatic missions. For example exports to Guatemala would require attestation of

manufacturing license, quality certificate, etc. by their diplomatic mission. Many of these

small nations do not have diplomatic mission in India posing hurdles for Indian exporters.

Argentina There is delay in registration leading to non-viability of exports

Armenia Armenia stipulates registration requirements and mandates permission for

imports and exports

Brazil Procedural delays occur in the clearances, inspections and registration by the

Brazilian Health Surveillance Agency (ANVISA)

Colombia The registration by Colombian Drugs Control and Certification takes 11 to 12

months, inspections are undertaken for environmental compliance and a 10%

price preference is granted for French pharmaceutical companies under a

bilateral agreement

Korea Certification requirements (including prior approval) add on to the cost of

exports

Ukraine A compulsory certification with the option of either (a) certificate of acceptance

of foreign certification by Derzh Standard or (b) Conformance certificate by

Ukrainian Agency. Though ISO 9000 Standards are adopted by Derzh Standard,

foreign certification recognition exists only to the extent of international treaty

obligations of Ukraine.

Strategies for Improving Exports

Cluster Development: There is an urgent need for providing common facilities in

the major pharmaceutical clusters such as cogent power, Transmission &

Distribution lines, effluent treatment facilities, and allied common infrastructure.

The Common Facility Centres proposed to be set up in clusters should have all

necessary equipment for testing quality and standards.

Financial support to pharmaceutical industry: Pharmaceutical sector has a long

gestation period as the benefits by way of margins accrue to the companies after

lot of investments. Regulatory approvals as also R&D and emerging technologies

require lot of investments which the predominant SME sector at present is not

able to arrange. Banks/financial institutions should be sensitized for funding both

tangible and intangible assets especially in around 200 complex

API/Intermediates and formulation technologies that are untapped by Indian

industry. Around Rs.6000 crores for CAPEX of 200 API facilities, 2000 crores for

200 technologies, Rs.1500 crores for 1000 patents, 100 crores per year funding

for shared services in 20 identified foreign markets will be required for building

up the capacities and giving a competitive advantage to Indian pharmaceutical

companies for achieving the set targets.

Aggressive Diffusion of Knowledge: Understanding of global markets, IP issues,

GMP & Compliance, legal contract capabilities etc. are limited to top companies.

There is an urgent need for starting training programmes in centres like NIPER

with additional focus of providing industrial support like advanced testing

services, facilitating education needs, promoting incubation centres to foster

new ideas.

Shared services in foreign countries: There is a need to promote shared services

in foreign countries such as setting up of warehouses and office space for initial

launch period; purchase of RLD drugs, information on market, regulatory

guidelines and other procedures, facilitating initial entry work into the country

like submission of regulatory documents on behalf of SMEs, etc., Such a move

will result in significant cost savings to domestic companies enhancing their

competitiveness.

Herbal Industrial Parks: Herbal industrial parks in line with model concept of

JNPC should be developed wherein the national priority 25 herbals are processed

into GMP facilities and infrastructure for necessary conversion into end use

formulations is provided.

Setting up of Pharmaceutical Zones- Ensuring creation of Pharmaceutical zones

to provide temperature control storage facilities at ports and airports with large

pharmaceutical trade to preserve quality and efficacy of drugs.

SEZs: SEZs are essential for the growth of Industry. The gestation period to

commence and obtain regulatory approvals takes at least 4 to 5 years. Hence the

direct tax code related limits for setting up of new units and new SEZs should not

apply to this strategic sector. Allow the use of SEZ unit for domestic purpose until

the regulatory approvals take place i.e., in first five years.

Standards: Establishing mandatory standards in this sector will on the one hand

prevent dumping of sub-standard products by foreign enterprises while on the

other hand it will help the domestic industry to raise its manufacturing capability

to provide better quality drugs to local consumers in the short run. It will also

make industry better equipped to meet international norms in the long run

without having to invest in parallel ‘export only’ facilities.

Brand: There is a need to develop, promote and implement a large campaign in

important markets to build a strong brand image for Indian pharmaceuticals and

position them as safe, effective, affordable products of high quality.

Industry – Research institution Linkage: Pharmaceutical sector is highly

dependent on skilled human resource and international successes have been

propelled by availability of good quality human resources around pharmaceutical

manufacturing centres. To further build on small initiatives like NIPER

undertaken by Indian pharmaceutical, there is a need to develop partnership or

leverage the research capacities of large research institutions, universities and

centres of excellence.

Define high tech value addition: Frontier areas in the pharmaceutical industry are

those which are based on development of new chemical entities. These are

followed by efforts to develop non infringing processes for existing drugs. The

lowest end involves formulations from imported APIs with little local value

addition. It is imperative to define high-tech/high value add products and

develop schemes to support their production and export.

Strengthening of DCGI: Ease of compliance with global regulatory requirements

ensures quality in both domestic markets and imports, enhances competition

among domestic and foreign generic companies, enables capturing business of

regulated markets and establishes much required confidence in Indian

capabilities among foreign buyers. Strict implementation of cGMP to include

mandatory bio-equivalence tests.

Bioequivalence Centres: Mechanisms to have access to bioequivalence centres to

conduct studies at concessional price for Indian pharmaceutical exporters.

Reimbursement of 50% of bioequivalence expenses incurred, upon proof of

adequate sales.

References

www.commerce.nic.in

www.chemexcil.gov.in

www.trade.iift.ac.in