Reson for Decline of Pharma companies in an exponential rate over the past decade
At a time when Banglore was hailed as IT capital of India, parallely Hyderabad , was lauded as the Pharma Capital of India. The growth of Pharma companies in an exponential rate, in the times of 1998 - 2002 is widely attributed to the then Government's support in Andhra Pradesh, in the form of TAX incentives, uninterrupted power supply and a complimentary infrastructure.
Despite, the entire country registering a robust growth in Pharma SEctor, contrastingly Andhra Pradesh, is lossing it's market share in Pharma Sector. In 2007 The total Pharma Units in Andhra Pradesh were 727 , out of Which Formulation units are 598 and Bulk Drugs are 199.
The state, which once topped the country in the manufacture of bulk drugs and formulations, has been overtaken by proactive states like Gujarat, Himachal Pradesh and Uttarakhand. This comes, despite having a huge coastline , facilitating an easy export from Shipping ports like Vizag, Krishnapatnam etc.
In the last five years alone, as many as 260 pharma units have either downed shutters or moved to states offering attractive sops.
According to statistics available with the Drugs Control Administration (DCA), the number of pharma units including bulk drugs units, formulations, loan licenses, vaccine units and surgical units stood at 1,865 in 2005-06. But in 2012, that number has come down to 1,605 units.
Industry sources said that the main reason for units deserting the state was
a) The absence of incentives from the state government. With Gujarat, Himachal and Uttarakhand offering incentives like income tax and excise exemptions, pharma units are finding it profitable to move out.
b) The lack of Quality and sufficeint power supply, killing the productivity of the whole company.
c) Lack of a friendly and progressive environment, frequent political turmoils and an uncertainity atmosphere.
"Lakhs of crores worth drugs are set to go off the patent globally by 2015. The Indian pharma industry, especially that in AP, should grab this opportunity. But our state is lagging behind others which have been giving incentives on income tax and excise duties," M Venkat Reddy, pharma expert and former director of State Drugs Control Administration (DCA).
Gujarat emerged as the top destination for pharma units due to the speedy disposal of applications for licences and certificates. In our state, if a company applies for GMP (WHO) certificate for exports, it takes several months to get the clearance whereas in Gujarat, the certificate is issued in less than a month," lamented Celon Laboratories Ltd founder and managing director KV Ravindra.
In the last five years alone, as many as 260 pharma units have either downed shutters or moved to states offering attractive sops.
According to statistics available with the Drugs Control Administration (DCA), the number of pharma units including bulk drugs units, formulations, loan licenses, vaccine units and surgical units stood at 1,865 in 2005-06. But in 2012, that number has come down to 1,605 units.
Industry sources said that the main reason for units deserting the state was
a) The absence of incentives from the state government. With Gujarat, Himachal and Uttarakhand offering incentives like income tax and excise exemptions, pharma units are finding it profitable to move out.
b) The lack of Quality and sufficeint power supply, killing the productivity of the whole company.
c) Lack of a friendly and progressive environment, frequent political turmoils and an uncertainity atmosphere.
"Lakhs of crores worth drugs are set to go off the patent globally by 2015. The Indian pharma industry, especially that in AP, should grab this opportunity. But our state is lagging behind others which have been giving incentives on income tax and excise duties," M Venkat Reddy, pharma expert and former director of State Drugs Control Administration (DCA).
Gujarat emerged as the top destination for pharma units due to the speedy disposal of applications for licences and certificates. In our state, if a company applies for GMP (WHO) certificate for exports, it takes several months to get the clearance whereas in Gujarat, the certificate is issued in less than a month," lamented Celon Laboratories Ltd founder and managing director KV Ravindra.
