While the sun set on the last century, it started shining bright on the burgeoning pharma industry in Goa. Pharma bigwigs like Glenmark, Zydus Cadila Health Care, Unichem, Lupin, Ratio Pharma, Watson, Ranbaxy, Aventis, Cipla, Wyeth, Abbott rushed to set up their manufacturing units in the coastal state after it became a tax haven in mid-1990s. The industry’s growth projectile continued to climb up well into the 21st century and the pharma sector emerged as a major component in the industrial development of Goa. Today, the state enjoys the status of being one of the biggest pharma hubs in India, with ample generic R&D and manufacturing facilities. Home to as many as 70 companies, the state now exports about 80 per cent of its total manufactured products to the globe, including heavily regulated markets like the US and the EU. Needless to say, the contribution of the the Goa Pharma Inc to the net national pharma exports is quite noteworthy.
A transforming landscape
Presently, the Indian pharma industry enjoys a double-digit growth – India’s pharma exports rose 11 per cent to $19.2 billion in 2018-19, accounting for about six per cent of the country’s total
exports of $331 billion in this fiscal, according to a report published by Pharmexcil. However, the industry could be facing a rocky road ahead. Mahesh Gurnasinghani, Senior GM, Pharma Technology Transfer, Watson Pharma notes, “In the recent times it (the Indian pharma industry) has been impacted by several challenges like patent cliffs, substantial price erosion, decreased value from new product launches, consolidation of supply chain and increase in competition with increased regulatory scrutiny in the global market. Our position as a global supplier of good quality, affordable, accessible medicines has also been impacted due to the recent compliance challenges and low productivity.”
Incidentally, Goa too has been mirroring this downward trend. “Goa in the last five years might not have had the expected growth, like it grew in the early 2000s,” Gurnasinghani adds. So, what changed in the last decade and affected the growth momentum of the Goa Pharma Inc?
And what can be done to set things right?
“The first step is to acknowledge the forces at play and redefine our strategies and operating models to address them. Thus, we need to focus on some of the major dynamic influencing factors,” advises Gurnasinghani.
Quality and compliance – mandatory for progress
One of the most pressing factors that impact the growth of any industry is quality and compliance. But, the industry and the regulators often end up locking horns over these issues.
“Almost 80-90 per cent exports from Goa are to the US. So, quality compliance is a worrisome issue that needs to be tackled very carefully in times when the US FDA is giving out warning letters quite frequently. This may have also contributed to shutting down of R&D facilities. Many companies are reducing their workforce in R&D. Even the manufacturing sector has taken a hit,” explains AV Kiran, Head – R&D, Sanofi India.
And, as 483 citations and warning letters become common, operations are affected and the brunt is borne by companies which are forced to pause their production activities. Similarly, compliance issues with domestic regulations too have often disrupted the industry. For instance, the Indian government’s ban on fixed-dose combination drugs in 2018. Pankaj Kumar, Associate VP, R&D, Wallace Pharmaceuticals points out, “I agree that there has been a problem with fixed-dose combinations. However, FDA mandates that products which have been in the market for 40-50 years should also undergo post marketing surveilence (PMS) studies. It may be possible for big companies to afford that, but such procedures can take a financial toll on smaller companies. It can even lead to them closing down segments of their businesses.”
The FDA, however, has a different outlook. Maintaining that patient safety comes first, Jyoti Sardesai, Director, FDA, Goa states that regulations are made more stringent so that it can be ensured that the manufactured medicines are safe, effective and affordable. And for a heavily export-oriented industry, Goa has to meet even stricter compliance guidelines. The government, she explains, only helps the manufacturers fulfil these requirements.
“The FDA is here to help the industry achieve sustainable growth. To remain in competition, manufacturers must ensure that their products are up to standards in terms of quality. Medicines should deliver the right effect. Government rules are framed in such a way that they help manufacturers achieve these requirements,” says Sardesai.
Pankaj Kumar
The industry also agrees that better quality and regulatory compliance is a must for sustained progress. Gurnasinghani too finds that better quality control is one of the first measures that the industry can take to ensure that it leads the global competition. “Manufacturers need to build a stronger quality system to achieve full compliance. Being a heavily regulated industry, we need to make our systems very sturdy and full proof so that we are devoid of these compliance issues. This is the most basic thing that we must do – unless we have this, we will not be able to operate. Build a strong quality and compliance system is imperative,” he remarks.
Innovating for innovation
Generic drug manufacturing was a formula that worked quite well for Goa. But a surge in global competition, with R&D driven markets like South Korea changing the international market scenario, has made it more difficult for the India Pharma Inc, and Goa, to sustain solely on manufacturing generics. “In the 1990s, Goa set up an example for the pharma industry by setting up a lot of manufacturing facilities. But, since then, there has been no significant expansion. Only a handful of companies thought about setting up research and development facilities in Goa. This has been the biggest setback for Goa. In present times, the state is identified purely as a manufacturing hub,” states Kiran.
He said that the industry needs to shift its expertise from copying to innovation and emphasised that R&D is the key for Goa to achieve its development goals. “The kind of operational structure that works for the generic industry will not work for the innovation industry. We will have to first work on that,” points out Kiran.
Dr Praveen Khullar, Deputy Head Scientific & Technical support & Head of Global Development Centre, Goa – Sanofi Synthelabo also notes, “Lately, there has been a shrink in the R&D pipeline. And if the R&D pipeline is shrinking, then generics will also go down.” He stressed on the need to adapt to rapidly changing business environments as well as adopting innovative approaches. Speaking on this, Gurnasinghani observes, “We need to see how innovative we are in terms of innovations to be competitive in the market. In the end, we also need to look at alternative sourcing and sale sufficiencies in the intermediates. Though Goa does not allow APIs, we still need to see how these alternative materials can be used to sustain in terms of cost-effectiveness.”
Tapping the talent
Lack of innovation, and lack of R&D facilities has also impacted the talent pool that Goa is famed for. “This is a negative point for students who study in pharmacy colleges here, especially from Goa College of Pharmacy. Despite the college being one of the best in India for the sector, and despite it having great infrastructure and teaching standards, a lot of students with great potential miss out on opportunities due to lack of R&D infrastructure in the state. But this is also one of the biggest opportunities for Goa. Manufacturing facilities and startups looking at Goa should take note,” remarks Kiran. “It is the responsibility of the government and manufacturers to boost innovation and R&D capabilities in Goa by setting up research and development facilities, upgrading their infrastructure, government help, and using the quality talent pool already available in the state,” he adds.
Speaking about the potential of the human resource that the pharmacy colleges in Goa churn out, Arun Naik, MD, Merit Pharmaceuticals states, “Goa had a good pharmacy college – Goa College of Pharmacy which is one of the oldest in India. However, often the graduates from this college had to go out in search of greener pastures because of lack of employment opportunities in Goa. Many alumni of this college have made a big name in pharma companies abroad as well as in India.”
As Naik points out, lack of employment in the R&D sector has resulted in a brain drain. The case is even more severe when it comes to women. Kiran notes that a majority of students passing out from Goa College of Pharmacy are women. However, Goa being a manufacturing dominated industry, deprives employment opportunities to a majority of these women due to various social and professional constraints.
Naik, though, is confident that the Goa pharma industry can overcome most of the challenges that it faces if it effectively uses the rich talent pool available in the state. And, building a proper R&D infrastructure is just the right step in this direction. He concludes, “The biggest challenge is to be a drug innovator rather than a mere drug producer and with highly educated and skilled manpower we can aspire to overcome that challenge as well.”
Need for enhanced industry-regulator collaborations
By no surprise, the regulators and the manufacturers do not exactly see eye to eye. While the latter thinks that stringent regulations only end up hampering the manufacturing processes, therefore setting them and by extension, the industry back, the regulators feel that they only help the manufacturers by making them adhere to the guidelines that are imposed upon by the heavily regulated markets like the US.
Goa FDA head, Sardesai says, “FDA has been supporting manufacturers in achieving sustainable growth. We have always been proactive about helping them. We have simplified processes. For example, earlier, for deposition of fees, manufacturers had to physically come to the office, take the designated officer’s signature, deposit the amount in the bank, get an acknowledgement copy, deposit it with the FDA. It was a lengthy process. But now the payments are done with e-challan. We have simplified procedures; information about ready reckoner charges and other things is readily available on our website. Everything is done in a very transparent manner. ”
Talking about the recent change in provisions that the Indian government has made, Sardesai says, “The government has come out with new amendments and regulations. BA and BE studies have been made compulsory, so have been the submission of stability studies. Another rule introduced in January is that manufacturers have to upload all their applications, licenses, product permissions and other important documents on the SUGAM portal. All these things are available, all this data is deposited with the government so that it can keep track of the number and types of formulations are being manufactured in different states. QR code has been made mandatory for APIs to facilitate product identification. The goal is to keep things transparent to ensure that data is available if and when required.”
While the industry applauded the regulator’s intent on SUGAM portal (and etc), many manufacturers also have certain reservations. “A major challenge that we face today is that unlike the international circuits, regulatory guidelines in India are changed frequently. Even with SUGAM portal, we can see that a lot of us are finding difficulties while uploading as they require unnecessary data which is of no use to us, but since it is there in the default format, we have to. I feel that before making something like this compulsory, the regulators and manufacturers need to have an open discussion about how the process will be executed. That way, it will not hamper operational and financial functions,” finds Kumar.
Giving deep insights on the issue, Naik says, “Indian regulators have been doing a wonderful job in rising to expectations of the industry – acting as a hand holder rather than as a policeman. However, I feel a little more is expected of them in the sense that every single officer in their cadre should be ingrained with this attitude of looking at the industry as not offenders, but as partners in providing quality medicines to the people all over the world. This requires a change in their mindsets which is possible by imparting good training immediately after they are absorbed in their jobs. I remember that during my Presidentship of our manufacturers’ association in Goa a decade or so ago, I did not miss a single opportunity to hold training sessions for industry professionals with officers of Medicines Control Agency (MCA) so that the industry keeps pace with the latest requirements in the field of regulatory compliance.
These regulators were more than happy to interact with the industry because they looked at it as an exercise which would assure defect-free products exported to their country. It’s time the Indian regulators genuinely hand hold the industry professionals, rather than playing the role of a mere big brother.”
Noting that a lot rides on the cooperation provided by the regulators, Gurnasinghani says that Goa has the potential to flourish a lot more if the government provides key requirements such as electricity, water, roads and other infrastructure, apart from other encouraging policies.
Making Goa great again
With most of the reasons behind the sectors current stagnant state now laid bare, what lies ahead? Industry experts would believe that these challenges faced by the sector, might actually be great opportunities in disguise — opportunities to grow, to break through. As Gurnasinghani highlights, “These transitional phases also offer opportunities to dry out ineffectiveness and build innovative capabilities. I believe that the Indian pharma industry, owing to its fundamentals can embrace these challenges and overcome this temporary environment to strengthen its growth. And Goa can be the forerunner in this aspect.”
Citing his reasons for this belief, he states, “Goa is strategically located with good infrastructure. Since, nearly the entire local industry is into overseas sales, its production facilities conform to rigorous standards set by the overseas institutions. Furthermore, there is continuous upgrading of the facilities to increase value addition to cater to the demands of the export market. The pharma industry is a knowledge-based industry and Goa has many sound educational institutions and skilled human resources which provides quality and affordable healthcare services to the common people. The state is well placed to be a premier pharma supply market.”
In agreement with Gurnasinghani, Kiran too feels that the state has the potential to make the best of the circumstances and improve them by having a strategic, long term plan for the next five-ten years with the rapid evolution that the Indian pharma sector is undergoing.
Kiran concludes, “Goa has the potential to generate a lot of work, opportunities in future for every sector. But the pharma sector can benefit from it even more, as it has a well established, mature network and structure in the state already.” Thus, it seems that these ‘roadblocks’ are simply stepping stones, waiting for the industry to once again tread the path to glory.
tarannum.rana@expressindia.com