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 markets 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 201213 from
$6.23 billion in 200607, 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 Childrens 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;
Indias 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 FY0613. During the same period, pharmaceutical
products imports rose at a CAGR of 25.4 per cent to $1.8 billion.
Importe rs

Exporte d va lue in Exporte d va lue in

2008
2009

Exporte d va lue
in 2 0 10

Exporte d
va lue in 2 0 11

Exporte d
va lue in 2 0 12

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

61477

82130

122282

134228

165378

149859

107667

122253

131923

164942

Ghana
Ukraine

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

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
countrys 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 vialampoules 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 FDAs 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 FDAs 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 postregistration 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