Gujarat Pharma Industry

Transcription

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GujaratPharmaIndustry
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Gujarat:04WhitepaperA4v2.qxt
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Foreword
Theglobalpharmaceuticalindustryisdemonstratingmarkedtrendsinrecent
times,withthefocusshiftingfromtraditionalmarketslikeU.S.topromisingnew
onesparticularlyLatinAmericaandAsiaPacific.Indiatoo,hascarvedouta
significantportionoftheworldpharmapie,registeringgrowthacrosssegments
includinggenerics,researchanddevelopmentofNewChemicalEntities(NCE)
andContractResearchandManufacturingServices(CRAMS).
AttheforefrontofthegrowthinthepharmaceuticalindustryinIndiaisGujarat.
Accountingfornearly42percentshareofIndia’spharmaceuticalturnover,22
percentofitsdrugexportsand20percentofitschemicalsoutput,Gujarat’s
pharmaceuticalindustryhasevolvedintoaninnovation-driven,
knowledge-focusedindustry.
Goingforward,toattainaleadingpositionintheglobalpharmaindustry,Gujarat
wouldhavetodevelopintoanideallocationforglobalclinicalresearch,avid
competitorinCRAMSandcentreofexcellenceforoverallpharmaceutical
development.Further,thestatewillalsohavetocapitaliseonemerging
opportunitiessuchasmedicaltourism,contractresearchandpharmaceutical
machinerymanufacturing.Keytothisprocesswillbe-buildingglobal
competitiveness,developingastrongtalentpoolandadoptingaconduciveglobal
mindset.
Pankaj Patel
Chairman and Managing Director,
Cadila Healthcare Ltd.
Pradeep Udhas
Head - Markets
KPMG in India
Share of Gujarat
42%
India’s Pharma
Turnover
22%
India’s Drug
Exports
52000
People Employed in
Gujarat’s Pharma Industry
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TableofContents
Global Pharma Industry – An Overview
01
Indian Pharma Industry – An Overview
02
Gujarat State Profile
04
Gujarat Pharma Industry
06
Evolution
Key Statistics and Comparison
SWOT Analysis
Cluster Analysis
Pharma SEZs in Gujarat
07
10
11
14
Building Blocks and Key Imperatives
15
Creation of a Global Pharmaceutical Hub
Conclusion
18
21
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GujaratPharmaIndustry01
GlobalPharmaIndustry-An
Overview
Theglobalpharmaindustryiscurrentlyundergoingsignificanttransformation.
EstimatedataroundUSD607.9billionin2006,theglobalpharmaindustryhas
grownataCompoundedAnnualGrowthRate(CAGR)of6-7percentoverthelast
threetofouryears.TheNorthAmericanregionandinparticular,theU.S.market
dominatestheindustry,followedbyEuropeandJapan.In2006,thesethree
marketstogetherconstitutedabout87percentoftheglobalpharmamarket.
Significant Trends
Asia-Pacific and Latin America- emerging as the most promising
markets for growth
TheAsia-PacificregionandLatinAmericacurrentlyconstituteasmallershareof
theentireglobalindustry.However,theseareemergingmarketsandaregrowing
ataremarkablerateascomparedtothedevelopedmarkets.Thisismainlyon
accountoffavorableeconomicanddemographicshiftsinthesemarketswhich
aresupportedbysignificantregulatoryreforms.
Market share of generics growing consistently
Governmentsworldwideareencouragingtheuseofgenericproductsinorderto
controlsteeplyrisinghealthcarebudgets.Currently,emergingmarketscontribute
60percentwhiletheregulatedonesaccountfortheremaining40percentofthe
worldgenericspie.Globally,thegenericspenetrationisexpectedtoincrease
significantlyinthecomingyears.
Reducing R&D productivity
AseriousconcernforpharmacompaniesworldwideisthedecliningResearch
andDevelopment(R&D)productivitywithareducednumberofblockbusterdrugs
enteringthemarketannually.Thisisfurtheraggravatedbysteadilyrisingdrug
discoveryanddevelopmentcosts.
Off-shoring/Outsourcing non-core activities to low cost destinations
Theglobalpharmaindustryisundertremendouspressureonaccountof
intensifyingcompetition,weakR&Dpipelines,increasingtime-to-marketofnovel
productsandfewerapprovalsforthcomingfromregulatorstheworldover.Asa
result,thelastfewyearshavewitnessedarapidlygrowingtrendofoutsourcing
andoff-shoringactivities.Multinationalsareincreasingtheircostefficienciesby
outsourcingnon-corefunctions-suchasdrugdevelopmentandmanufacturingto
lowcostdestinations,inordertofocusoncoreoperationslikedrugdiscovery,
sales&marketingandbrandmanagement.
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02GujaratPharmaIndustry
IndianPharmaIndustry-An
Overview
TheIndianpharmaindustryhasgainedsignificanttractioninthelastfewyears.It
iscurrentlyonahighgrowthtrajectoryandrapidlyintegratingwiththeglobal
industry.ThisintegrationisopeninguptremendousnewopportunitiesforIndian
Pharmaacrossallsegmentsincludinggenerics,researchanddevelopmentof
NewChemicalEntities(NCE)andContractResearchandManufacturingServices
(CRAMS).Indiancompaniesarenowwellpositionedtoexplorethese
opportunitiesastheyadopteffectiveandefficientbusinessmodelsthatare
spreadacrossoneormoreofeachofthesesegments.
Key Segment and Trends for Indian Pharma
Domestic Market Attractiveness
ThedomesticformulationsindustryhasgrownataCAGRofnearly13percent
from2002-07.ThismarketisexpectedtofurthergrowataCAGRof16percent
overthenextfiveyears.ThisgrowthwillbespurredprimarilybyIndia’sexpected
economicprosperity.Theindustryisalsowitnessingagradualshiftinthedisease
patterntowardschronicailmentssuchascardiovasculardiseases,diabetes,
obesity,etc.,reflectingthechanginglifestyleofIndia’surbanpopulation.
Inthemediumtolong-term,aconsiderableshareofthegrowthisexpectedto
comefromtheTierIIandIIIcitiesandruralmarkets,inadditiontoTierIcities.
Global Generics Opportunity
ForIndianPharma,genericshasalwaysbeenthemainstayoftheindustry.Indian
companieshavetranscendeddomesticboundariesandexploredinternational
marketsandinparticulartheU.S.andEuropeancountries.However,Indian
companiesarenowshiftingfocusandforayingintonewunder-servedand
emergingmarketsinLatinAmerica,SouthAfrica,RussiaandotherCISnations
andJapan.Semi-regulatedmarketsoffertremendouspotentialduetothe
continuouslyimprovingeconomic,demographicandregulatoryfactors.
Almostallthesegenericsmarketsarenowsettoreportdouble-digitgrowth.
Currently,Indiahascapturedonly10percentoftheglobalgenericsindustry.
However,itholdsadominantpositionintermsofthetotalAbbreviatedNewDrug
Application(ANDA)andDrugMasterFile(DMF)filings.Hence,IndianPharmais
aggressivelypursuingitsgrowthstrategythroughacquisitions,marketingand
distributionalliances,increasedfocusonbuildingnichetherapeuticportfoliosand
ParaIVfilings.
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Research and Development
WiththeintroductionofproductpatentsinIndia,pharmacompanieshave
recognisedNCEresearchasoneofthekeystrategiesforlongtermsurvivaland
growth.Mostleadingcompanieshaveventuredintothissegment.Thetop
pharmacompaniesarenowshellingoutasmuchas7-9percentoftheirsales
revenuestowardsconductingNCEandNDDSresearch.Theimpressivegrowth
andspecialisationachievedbyIndiainthissegmenthasalsoattractedthe
attentionofmultinationalinnovatorcompanies,whichareincreasinglypartnering
withdomesticcompaniesthroughin-licensingandout-licensingdeals.
Anothertrendobservedisthatseveralplayersarehiving-offtheirR&Dunitsinto
separateentitiesinordertoincreasethefocusontheirresearchoperations,scale
upoperations,improvethescopeofcollaboration,adopteffectivefundingmodels
andoptimiseresourcemobilisationandutilisation.
Contract Research and Manufacturing Services (CRAMS)
Indiaisalsoincreasinglyemergingasoneofthemostgloballypreferred
outsourcing/offshoringdestinationsforpharma.Thistrendcanbelargely
attributedtoIndia’sinherentcompetenciesintermsoflowmanufacturingcost,
highestnumberofU.S.FDAapprovedplantsoutsidetheU.S.,vasttalentpool
havingexcellentchemistryskills;diversepatientpool,strongsupportfrom
ancillaryindustriessuchasbio-informatics,clinicaldatamanagement,etc.;and
favourableregulatoryenvironment.IndianPharmaisnowbroadeningthescope
ofitsserviceofferingsbyprovidingawiderangeofservicesspanningtheentire
pharmavaluechain.
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GujaratStateProfile
Locatedonthewesterncoast,GujaratisIndia’sseventhlargeststateintermsof
areaandninthlargestintermsofpopulation.Thestate’scapital,Gandhinagar,is
Fact-file
thesecondplannedcityinthecountry(afterChandigarh)andislocatedjust32
StateCapital
Gandhinagar
Area(sq.km.)
1,96,000
Population
(Census2001,
Million)
50.6
LiteracyRate
(percent)
69
SexRatio(per
1000males)
921
Lengthof
coastline(km)
1,600(thelongest
inIndia)
Gujarathassomeofthecountry'smostdynamicentrepreneurswhoareoriginal
andfast-pacedintheirthinkingandfocusedintheirdriveforgrowthand
profitability.
Accountingfor16percentofthecountry'stotalindustrialoutputand18percent
ofthecountry'stotalinvestment,Gujaratisoneofthemostindustrialisedstates
inthecountry.
GSDPatfactor
cost(current
54
price)(USDbillion)
GSDPover10
years(%)
kilometres(km)fromAhmedabad,thecommercialcapitalofGujarat.TheStateof
Roads
•Totalroadlength:73,600km
•Roadlengthper1000km:628.8
•Over95percentofroadlengthissurfaced.
12.4
NationalHighway
1,572
Length(km)
Ahmedabad,
Bhavnagar,Surat,
Bhuj,Rajkot,
DomesticAirports
Porbandar,Kandla,
Keshod,Vadodara,
Jamnagar
International
Airport
Ahmedabad
MajorPorts
Kandla,Dahej,
HaziraandMundra
KeyIndustries
Chemicals,Drugs
and
Pharmaceuticals,
Gemsand
Jewellery,Mines
andMinerals,
Textiles,
Agro-based
Airports
•HighestnumberofairportsascomparedtoanyotherstateinIndia
•InternationalairportatAhmedabad
•Domesticairports:Ahmedabad,Bhavnagar,Bhuj,Jamnagar,Kandla,
Keshod,Porbandar,Rajkot,Surat,Vadodra.
Power
•Installedgenerationcapacity:9,561MW(ason31-03-2007)
•Adequateinter-regionaltransmissionanddistributioncapacity
Monthlyper
capitaexpenditure 15.3
(USD)
Source: Gujarat Socio Economic Review 2006-07
•Estimatedpeakdemandforpowerin2011-12:14,031MW.
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Ports
•Totallengthofcoastline:1,600km-representingone-fourthof
India’swaterfront
•Fortyminorandintermediateports
•Tennewgreenfieldsitesidentifiedtobedevelopedasdeep-water
ports.
Railways
•Lengthofrailwayline:5,188routekms(ason31-03-2007)
•BroadGauge:2,736kms
MetreGauge:1,665kms
NarrowGauge:787kms.
Gas Grid
•Statewidegasgridof2,200km,ofwhich1,134kmisoperational
•Onlystatehavingmorethanonegasproducer
•Ambitiousprojectunderwaytocoverentirestatewithnetworkof
gaspipelines.
Gujarat has emerged as the SEZ capital of India based
on land area, with 51 sanctions, encompassing
16,500 hectares of land
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Brief overview of the evolution of Gujarat’s Pharma
Industry
AlembicChemicalWorksCo.Ltd.,oneoftheoldestpharmacompaniesinIndia,
wassetupinVadodarain1907,justsixyearsafterIndia’sfirstdomestic
pharmaceuticalunit-BengalChemicalandPharmaceuticalWorkswassetupin
Calcutta.SarabhaiChemicalswasstartedsoonthereafter.
Theindustryhadreceivedstrongsupportfromtheacademicfield.In1940,the
DrugsLaboratoryinVadodarawasestablished,followedbyLMCollegeof
Pharmacy.Furtherin1989,theB.V.PatelEducationTrust,Ahmedabadand
GujaratBranchofIndianPharmaceuticalAssociation(IPA)-establishedtheB.V.
PatelPharmaceuticalEducationandResearchDevelopment(PERD)Centrein
Ahmedabad.
Inthelastfewdecades,theinvestedcapitaltolabourratiohasrisensignificantly.
Theemploymentalmostdoubledbetween1979-80and1997-98.Overtheyears,
theindustryhasdevelopedstronglinkageswithrelatedsectorsandindustries
suchaschemicals,pharmamachinery,informationtechnology,etc.
Therearecurrentlyapproximately3,500drugmanufacturingunitsinGujarat.The
statehousesseveralestablishedcompaniessuchasTorrentPharma,Zydus
Cadila,Alembic,SunPharma,Claris,IntasPharmaceuticalsandDishman
Pharmaceuticals,whichhaveoperationsintheworld’smajorpharmamarkets.
Overthelastfewyears,Gujarat’scontributioninthegrowthofIndia’s
pharmaceuticalindustryhasbeensignificant.Thestatecommands42percent
shareofIndia’spharmaceuticalturnoverand22percentshareofexports.
Approximately52,000peopleareemployedinGujarat’spharmaceuticalsector,
whichhaswitnessed54percentCAGRincapitalinvestmentsoverthelastthree
years.1
1FoodandDrugControlAdministration(FDCA)
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Gujarat’s pharma industry: Some key statistics and
comparison with the Indian Pharma industry
Source: FDCA, CRISIL Report
ValuedatUSD4.4billionin2005-06,Gujarat’spharmaindustryhasgrownata
stupendousCAGRofalmost88percentbetween2002-03and2005-06,as
againstthe18percentgrowthregisteredbythepharmaindustryofIndiaasa
whole,inthecorrespondingperiod.
Intheexportssegmenttoo,Gujarat’spharmaceuticalindustries’performancehas
beenexemplary.Exports,valuedatUSD1.1billionin2005-06,havegrownatan
impressiveCAGRofnearly78percentbetween2002-03and2005-06asagainst
the28percentgrowthinIndia’stotalpharmaexportsduringthesameperiod.
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Source: FDCA,
Ofthestate’stotalexports,bulkdrugsconstitutedfor40percent,while
formulationsaccountedfortheremaining60percent.
GujaratholdsadominantpositioninIndia’spharmaindustry.Thestatehas
successfullycapturedashareofover42percentofIndia’stotalturnoverin
2005-06.Thisisasteepincreasefromthemere10percentmarketsharein
2002-03.
Intermsofexportsalso,Gujarat’sshareinIndia’stotalpharmaexportshas
increasedconsiderably.WhileGujarathadonlyan8percentmarketshareinthe
totalexportsin2002-03,by2005-06itaccountedforasmuchas22percent.
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Source: FDCA,
Asaprecursortogrowth,CapitalinvestmentinthepharmaindustryinGujarat
hasalsoincreasedatanastoundingCAGRofabout54percentbetweenFY’03
andFY’06–reflectedintheincreaseofnumberofunits(bothownaswellas
loan)from1,964in2003to3,462in2007.
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Gujarat Pharma – a SWOT analysis
Weaknesses
Strengths
•
•
•
•
•
•
• LowlevelofR&Dspend
• Relativelyinadequatetechnicalmanpowerand
skilledworkforce
• Limitedinternationalexposureformostsmall
tomediumscalecompanies.
Moderninfrastructurefacilities
Backwardlinkageswithrawmaterialsuppliers
Establishedpharmaindustry
Entrepreneurialmindset
Well-developedalliedindustries
Benignregulatoryenvironment.
Gujarat
Pharma
Opportunities
• SEZ-ledsignificantexportopportunities
• HighgrowthsegmentssuchasCRAMS,R&D
andgenerics.
Threats
• Announcementoftaxholidaysfrom
governmentsofotherIndianstates
• Emergenceofotheralternativepharma
destinationsabroad
• Inadequateemissionnormsandwaste
disposalfacilitiesmayhindergrowth.
Source: KPMG Analysis
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Clusters
A cluster is defined as a geographically proximate group of companies and
associated institutions in a particular field, linked by commonalities and
complementarities.
Foranysuccessfulindustry,oneofthedrivingforcesisthepresenceofSmall
andMediumscaleEnterprises(SMEs).ApeculiarcharacteristicofSMEsisthat,
generallytheyexistandthriveinclusters.
Examples
Types of Clusters
Resource-basedcluster
Marblecuttingandpolishingindustries
aroundMakranainRajasthan
Inducedcluster
Auto-componentindustryinGurgaon
triggeredbyMarutiSuzuki
‘Me-too’
CottonknitwearunitsinTirupur
Advantage derived from clusters
Proximityto
sourcesofraw
material
Availabilityof
business
development
services
Abundanceof
customers
Availabilityof
skilledlabour
Common
infrastructural
facilities
Common
mindsetand
healthy
competitive
culture
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Ahmedabad Cluster – A case study
AlargenumberofsmallfirmsweresetupinAhmedabadduringthe1970sand
1980s.Thisphasewasfurtherstrengthenedasaresultofgrowingexportsto
RussianandAfricancountries.Duringthisgrowthprocess,afewfirst
generationentrepreneursgraduatedfromsmalltomedium/largefirmsand
somelaterentrantsbecamesizeableenterprises.Inturn,thisgrowthphase
witnessedtheentryofnewentrepreneursinthesmallscalesector.
Atpresent,itisestimatedthattherearearound75-100bulkdrugproducersand
1000manufacturingunitsmostlyinformulationsandotherareasincluding
excipients,disposables,homeopathic,ISMandmiscellaneousproductsunder
thepurviewofFDCA.Ofthese10arelarge,100aremediumandtherestare
smallunits.ThemajorplayersinandaroundAhmedabadincludeZydusCadila,
SunPharma,Torrent,Core,Alembic,Dishman,IntasandSarabhai.Themajor
productsmanufacturedinthisclusterinclude:
(a)Pharmaceuticals—bothallopathicandayurvedicformulations,indifferent
dosageforms(includingtablets,liquid,capsules,externalsandinjectables),and
(b)MedicaldisposableproductslikeIVsets
Around50manufacturingunitsproducemedicaldisposables.Therestarein
formulationsincludingayurvedicproducts.
Why Ahmedabad?
Availabilityofraw
material
•Bulkdrugs
•Excipients
•Coatingmaterial
•Emptycapsules
•Preservatives
•Ampules
•Glassvials
SupportInstitutions
•B.V.PatelPERD
Center
•TheFoodand
DrugControl
Laboratory
•LMCollegeof
Pharmacy,
Vadodara
FinancialInstitutions
•SIDBI
•ICICI
•GSFC
Industrialassociations
•IDMA-GSB
•MDMA
•ADMA
Stronglinkagesbetweensmallandmediumsizeplayers,industrialbodies,andmedicalandfinancial
institutionshascreatedaproperecosystemforthegrowthofthepharmaceuticalindustryin
Ahmedabad.Thisinturn,hasmadeAhmedabadoneofthehighlydevelopedpharmaclustersin
Gujarat.
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Characteristic of pharma clusters in Gujarat
Market- based /
Resource-based /
Infrastructurebased
Degree of
Competition with
large units
Potential Future
Products
Location
Existing products
Export
Potential
Ahmedabad
API,FinishedDosages,
ContractManufacturing
BiologicalManufacturing
High
Marketand
Infrastructure
High
Biological
manufacturing,
MedicalDevices
Vadodara
FinishedDosages,
Biogenerics
High
Marketand
Infrastructure
High
API,CRAMS,
Biological
Manufacturing
Ankleshwar
APIs,Formulations,
Vaccines
Medium
Resource
Medium
APIsforglobal
companies
Bharuchand
Vapi/Valsad
APIs,FinishedDosages
Medium
Resource
Medium
Intermediateand
FinishedDosages
Source: www.clusterpulse.org, KPMG Analysis
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Pharma SEZs
TheproposedPharmaSEZsareexpectedtofurtherboostIndia’spharmaceutical
exportssegment.AndGujarat,whichiswitnessingavibrantgrowthinthis
segment,willbeoneofthemajorbeneficiariesofthisdevelopment.SEZsare
instrumentalinbringinginglobalizationatafasterpace,duetotheirinherent
outwardlookingforeigntradefocusbyestablishingcloseglobalcontacts.SEZs,
therefore,offerdistinctadvantagestoexportorientedpharmacompanieswho
arepresentinthesezones.
Currently,Indiarepresentsaverysmallportionoftheoutsourcingmarketas
comparedtoglobalpeerslikeChina,Singaporeetc.Additionally,thesizeof
projectshandledbyIndiaarealsosmall.SEZs—whichhavegoodinfrastructure
facilitiesandtechnology—canhelpthesepharmacompaniesdevelopaglobal
mindset.
GujaratissettowitnesstremendousbenefitsfromthedevelopmentofSEZs,as
italreadyhasanestablishedpharmaecosystemwithexcellentinfrastructure
facilities.ThroughtheseSEZs,pharmacompaniesinGujaratwillfurtherfacilitate
India'sintegrationintheglobalpharmaindustry.
Prominent Pharma SEZs in Gujarat
Company
Location
Likely Activities
Investment
Area
(Hectares)
ZydusCadila
Ahmedabad
NA
NA
48
CadilaPharma
Haripura
Pharmaceuticals,APIsand
Biologicals
500
100
Jubilant
Vilayat
Manufacturinghubfor
outsourcingofpharmaceuticals,
NA
finechemicalsandspecialty
chemicals
100
DishmanPharma
Ahmedabad
BulkDrugs
396
138
JBChemicals
Panoli(Bharuch)
BulkDrugs,Intermediaries,
R&Dandcontract
manufacturing
113
130
Source: Press Articles
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BuildingBlocksandKey
Imperatives
Therearecertainbuildingblocksthathelpindustriesflourish.Gujarat’spharma
industryisagoodexampleofawell-developedecosystemwithstrongbuilding
blocksthathavehelpedtheindustrygrowatsuchaphenomenalpace.
BelowisasummaryofhowsomethesebuildingblockshavehelpedGujarat
becomeoneoftheleadingstatesforthepharmaindustryinIndia.Further,the
keyimperativesforGujarattoretainitsexistingpositionandwhatwillittakeforit
tobecomeaglobalpharmaceuticalshub,havealsobeenhighlighted.
Thekeyimperativesforsomeofthesebuildingblocksare:
Modern and well-developed infrastructure: Gujaratboastsoneofthebest
infrastructurefacilitiesinthecountry.Beitroads,ports,powerorotherlogistical
facilities,Gujaratranksmuchhigherthanothercompetingstates.Ourmeetings
withvariousindustryleadersrevealedthatinfrastructurefacilitiesand
developmenthelpsthemimmenselyintheirbusinessoperations.Goingforward,
ifthisstrongimpetusoninfrastructuredevelopmentismaintained,theindustry
wouldgrowatasustainablerateinthefuture.
Conducive Business Environment: TheRajivGandhiInstituteforContemporary
StudieshasadjudgedGujaratasthebeststateinIndiafor’EconomicFreedom’.
Proactivegovernmentpoliciesandaninvestorfriendlyregimeisoneofthemain
buildingblocksforthegrowthofthepharmaceuticalaswellasanyotherindustry.
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Adequate Talent Pool: Theimportanceofaskilledworkforcefora
knowledge-basedindustrysuchaspharmaceuticalsshouldn’tbeunderemphasised.Theindustryneedsanadequatesupplyoflocallyavailableskilled
labourinordertomeettherequirementsofthisrapidlygrowingindustry.Asfar
asavailabilityandemployabilityoftheskilledlabourrequiredforthe
pharmaceuticalindustryisconcerned,GujaratlagsbehindotherprominentIndian
pharmahubs,particularlyMaharashtraandAndhraPradesh.
FromthetablebelowitisevidentthatGujarathasrelativelyfewerstudent
intakesandinstitutionsofferingPharmarelatedcourses.Therefore,todevelop
intoaworldclasspharmaindustryandmeetthedemandforskilledlabour,
Gujaratwillhavetosignificantlyincreaseboththenumberofinstitutionsoffering
Pharmarelatedcoursesandstudentintakes.
No. of Institutes offering
Pharma courses
Student intake
Gujarat
37
2,345
Maharashtra
83
4,482
AndhraPradesh
82
4,955
State
Source: Gujarat Socio Economic Review 2006-07
TheseareseveralinstitutionsinGujaratthatoffercoursesinpharmacyand
medicine.Theseinstitutionswillplayanimportantroleindeterminingthe
successofGujarat’spharmaceuticalindustryintheworldmarket.Thereisaneed
toexpeditetheprocessbyinvolvingtie-upswithinternationalresearchand
academicorganisationsandaugmentingthelocalcapacitytomeettheindustry’s
demand.
Cluster-driven Business Growth: ThegrowthofGujarat’spharmaceuticals
industrysofar,hasbeencluster-driven.Theseclustershavenotonlyfostered
competitivenessandcomplementaritiesacrosstheseregionsbuthavealso
createdadiversifiedmanufacturingbaseforvariousproductsacrossthe
pharmaceuticalvaluechain.Governmentalactionscansupportthecreationof
conditionsthatencouragetheformationandgrowthofclusters.Theseclusters
canalsohelpintermsofresourcesharingintheareasoftrainingandR&D
facilitiesaswellasotherfacilitiessuchaswastemanagementandwater
treatmentplants.Theregulatoryandfiscalframeworkshouldprovideincentives
thatfacilitatecompanyformationandgrowthwithinthepharmaceuticalclusters.
04-01-08
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Page 21
Global Competitiveness: Globalisationpermitsmuchgreaterfreedomfor
reapingcompetitiveadvantagesbasedonregionalresourceendowmentsand
opportunitiesforglobalintegration.GlobalisationofGujarat’spharmaceutical
industryandtheenhancedroleofmarketscouldoffergreateropportunities.
Gujarathasatraditionofregionalspecialisationinindustry(textiles,chemical,
petrochemicals,pharmawithinthelargescalesector;specificclustersofmedium
andsmallunitstooabound).Thelongtermdevelopmentperspectivewillhaveto
takeadvantageoftheregion’sexistingpotential.
Well-established Allied Industries: Stronglinkageswiththechemicalssector,a
wellestablishedmachineryandengineeringsector,largenumberofContract
ResearchOrganisations(CROs)andaboominghealthcaresectorhasplayedan
importantroleinthegrowthofGujarat’spharmaceuticalindustry.Partnerships
betweenhospitals,academicandresearchinstitutions,alliedindustriesand
pharmacompaniescancreateanefficientnetworkedmodelthatwillhelpthe
industrygrowatasustainablerate.
04-01-08
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Page 22
CreationofaGlobal
PharmaceuticalsHub
Emerging Opportunities
Gujarat,anestablishedmanufacturingbaseforbulkdrugsandformulations—
withitsinherentcompetitiveadvantages—ispoisedtocaptureemergingglobal
opportunitiestobecomeaglobalpharmaceuticalshub.EmergenceofSEZsis
• Medical Tourism
likelytocreateapharmabehemoth-withscaleandinfrastructureonparwith
• Contract Research
Organisations
Theavailabilityofawell-developedchemicalsindustry,whichhasstronglinkages
internationalstandards,thatwillenableittocompeteintheglobalmarketplace.
withpharmaAPI/intermediates,canbeutilisedtoboostthehighgrowthof
CRAMSsector.ThiscouldmakeGujaratastrongsourcingbaseforglobalpharma
companies.
• Pharmaceutical
Machinery
Emerging Opportunities:
Medical Tourism: WithIndiarapidlyemergingasanattractivemedicaltourism
hub,Gujaratisalsomakingbigstridesinthissegment.Itisfastcompetingwith
otherplacessuchasDelhi,MaharashtraandAndhraPradeshinthissegment.The
stateoffershighqualityandspecialisedhealthcareservicesandinfrastructureat
verylowcosts,thusmakingitapreferreddestinationformedicaltourism.
Gujarathashighlyqualifiedspecialistsparticularlyintheophthalmology,urology,
embryology,orthodontics,oncologyandorthopedicstherapeuticareas.Italso
offersotheradvantagessuchasEnglish-speakinghealthcarepersonnel,no
waitingperiodsfortreatment,andhighstandardsofinternationaltransport.
GiventhegrowingattractivenessofIndiaasaglobaldestinationformedical
tourism,thegovernmentofGujaratlaiddownthe2006MedicalTourismpolicy.
Thiswillfurtherimprovethehealthcareinfrastructureofthestateandattracta
highernumberofpatients.
Thefollowingfactorscanfurtherboostmedicaltourism:
• Assistedhealthcareinstitutionssuchasdaycarecentres
• Supportservicessuchasnursingassociations
• Linkageswithinfrastructurefacilitiesfortransportationofpatientsfrom
airportsandrailwaystations
• Linkageswithorganisations/NGOs,etc.,inoverseascountriestoacquire
knowledgeandleverageopportunities.
04-01-08
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Page 23
Contract Research Organisations: Gujaratishometoapproximately40
percentofCROsinthecountry.Itswellestablishedhealthcaresector,strong
infrastructurefacilitiesandrelativelylowrealestatecostshasluredmanyglobal
andlocalCROstosetupshopinthestate.Globally,contractresearchisahigh
growthsegmentledbyincreasingoutsourcingactivitiesofpharmaMNCs.Given
allthesegrowthenablers,Gujaratcancapturealargerpieofthisglobal
opportunitybyestablishingastrongancillaryservicesindustrybase–suchas
bio-informaticsandclinicaldatamanagementcentres–whichcanfacilitateand
boostR&Dandotherhigh-endactivities.
Pharmaceutical Machinery: Thereisastronglocalandglobalopportunityfor
Gujaratinthemanufacturingofpharmaceuticalmachinery,givenitsstrongand
wellestablishedengineeringsector.Accordingtoindustryestimates,
approximately35-40percentofIndia’spharmaceuticalmachineryisproducedin
Gujarat.Thestronggrowthprospectsofthepharmaceuticalexportssegmentand
growingdemandfromthedomesticmarket,willfurtherfuelgrowthinthe
pharmaceuticalmachinerysector.However,Gujarat’sengineeringsectorishighly
fragmented,especiallythepharmamachinerymanufacturingsegment.Dueto
thehighlyfragmentednature,thereisadearthofpricingpowerandcriticalscale.
Thisinturnrestrictstheabilitytoproducethetechnology-drivenproducts
requiredforoperatinginglobalmarkets.Thepharmamachinerymanufacturing
industryinGujaratneedstoconsolidateandsynergisetheskillsand
complementaritiesavailableinthebroaderengineeringsector(liketheCNC
machinetoolsindustry)tobeabletocreateworld-classplayerswiththescale
andresourcesrequired,totaptheglobalaswellaslocaldemand.
Gujarat’sdominantpositioninIndia’spharmaceuticalsectoriswellknown.The
nextlogicalstepistoaspireforgloballeadershipinthepharmaceuticalindustry.
However,globaldominancewouldrequire:
–Continuanceofcurrentgrowth-orientedpoliciesthathavehelpedGujarat
achievethismark,and
–Acquisitionordevelopmentofcapabilitiesrequiredforoperatingintheglobal
marketplace.
04-01-08
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Page 24
ManypharmacompaniesinGujarathaveadoptedtheinorganicrouteto
participateintheglobalmarkets.However,operatingintheworldmarketsisnot
justaboutacquiringglobalassetsbutalsoabouthavingaglobalmindset.Inorder
tobenefitfromtheon-goingintegrationoftheworldpharmamarkets,the
pharmaindustryandcompanieshavetochangeinternalmindsetstothinkand
competeglobally,andcreateanenvironmentofinnovation.Companieswould
havetoimbibeaculturethatenhancesitsefficiencywhilerespondingtothe
globalchallengesindifferentgeographies.Havingaworld-classmanagement
team,reflectiveofthediverseglobalmarketsinwhichtheyoperate,wouldbea
startinthisdirection.Theenterprise-wideuseofglobalITsolutionsisanother
areathatneedstobeaddressed.
Globalisation model for Gujarat’s Pharmaceuticals Industry
04-01-08
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Page 25
Conclusion
Indiaisbecominganintegralpartoftheglobalpharmaceuticalvaluechainand
manyIndiancompaniesareparticipatinginthisglobalgrowthpotentialthrough
theirorganicaswellasinorganicinitiatives.PharmacompaniesfromGujarathave
alsocontributedsignificantlytothisprocessthroughacquisitionsofforeign
assetsorbyhavingexport-ledbusinessmodels–reflectedinGujarat’sincreasing
shareinIndia’spharmaexportsaswellasindustryturnover.Goingforward,as
Indiafurtherincreasesitsdominanceintheworldpharmamarket,Gujaratwithits
growthenablersandstrongbuildingblockscanbecomeaglobalpharmaceutical
hub.However,thiswouldcallforanenormouschangeinmindsetand
transformationtoattractglobalcapitalandtalent.Thepathtoglobalisationisfull
ofopportunitiesbutalsofraughtwithrisks.Companieswhichwoulddevelopthe
rightframeworkthatwouldhelpthemcapitaliseonthisopportunityandmitigate
riskswillbenefitthemost.
04-01-08
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Page 26
AboutKPMGinIndia
KPMGistheglobalnetworkofprofessionalservicesfirmsofKPMGInternational.
Ourmemberfirmsprovideaudit,taxandadvisoryservicesthroughindustry
focused,talentedprofessionalswhodelivervalueforthebenefitoftheirclients
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ThememberfirmsofKPMGInternationalinIndiawereestablishedinSeptember
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whichreflectasharedknowledgeofglobalandlocalindustriesandour
experienceoftheIndianbusinessenvironment.
Acknowledgements
ThisreporthasbeenpreparedbyKPMG,andisbeingreleasedduringtheCentenaryCelebrationofGujarat’sPharmaIndustry,
inAhmedabad, on 5 January, 2008.This report is to be released by Shri Narendrabhai D. Modi, Honb'le Chief Minister of
Gujarat.
The people integrally involved in preparing this report includeAnishTripathi,Amit Shah, Nandita Kudchadkar, Rajiv Parekh,
Jiten Ganatra and Nisha Fernandes fromKPMG.We gratefully acknowledge the support and assistance received from the
PharmaCentenaryCelebrationCommittee.
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©2008KPMG,anIndianPartnershipandamemberfirm
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Allrightsreserved.
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Gujarat Pharma Industry

Transcription

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