Pharma industry in turmoil

70 companies shut down their shop in 15 days

Hyderabad: The pharma industry in the state, particularly in the city, is going through a turbulent phase as several units either shut their operations or struggle to stay afloat in the business owing to higher costs and government restrictions such as pollution and other laws.

If the closure of units is any indication to turmoil in the industry, already 70 units have shut their operations during the past 15 days, according to the industry body. Pharma units are facing unreasonable restrictions from the pollution control board more particularly on product changeovers.

The Telangana Association for Pharma & Chemical Industries (TAPCI), which has over 340 pharma units as members, has expressed its concern over the ongoing pathetic situation in the pharma industry.

Hyderabad is known as bulk drug capital of the country, but it’s fast losing its business activity on the domestic front and export edge in the global market, says TAPCI general secretary NV Narender.

He’s also member of task force on pharma city. In a chit chat with The Hans India, Narender said: “During the past 15 days, around 70 units have been closed down.

The main reasons are norms of Pollution Control Board, factory licence rules and other state regularization process as they have become a stumbling block for the pharmaceuticals industry growth.

Particularly, norms on pollution control are not allowing the industry to innovate. Hence, product changeovers are not possible in the state. In addition to this, higher production costs and government restrictions are taking a toll on the industry.”

Indian active pharmaceutical ingredients (API) manufacturers voiced their concerns over increasing competition from China.

Bulk Drug Manufacturers Association (BDMA) urged the Centre to extend subsidy support and speed up the approval process for new drugs.

National president of BDMA M Jayant Tagore said: “During the last decade, Indian API manufacturers lost their competitive edge to countries like China, primarily due to costly power, inadequate infrastructure, government restrictions on the volume of APIs produced in the existing plants, lack of financial support and incentives from the government, to match the Chinese govt. subsidisation of exports, delays in new drug approvals.” ciprofloxacin

Why should we make ciprofloxacin for 20 years continuously? questions Narender, while adding that policy restrictions creating blocks for product innovation. “Getting licence for change of product is not easy. If drugs and intermediates licence is given in Telangana, then it'll be beneficial.

So that companies can come out with new products as and when required in the market,” adds Narender. With pharma industry committed to environmental protection, there is need for flexibility in environmental laws with respect to products changeover and capacity enhancement within the approved pollution loads.

There is need for centralised environmental infrastructure in industrial clusters to make the pollution treatment more effective and cost competitive. With higher interest rates on loans, cost production becomes very high.

This erodes export competitiveness of the domestic pharma industry in the global market. Because, higher interest rate, power cost, other expenses including labour costs are making production costs higher.

“As long as these higher costs including term loans, working capital and interest rates, we’re unable to compete in the global market. Moreover, it’s difficult to even sustain in the business.

The latest closure of units is an evidence to this fact. We request Centre and state government should come together to support the industry. The government should ensure low interest loans.

Industry-friendly rules and regulations as part of their ease of doing business mission,” said Narender.

By: Sreenivasa Rao Dasari