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| Bulk drug firms want pollution norms relaxed |
| B Krishna Mohan / Hyderabad May 19, 2009, 00:38 IST |
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With consumers switching to ever newer drugs, getting licences for changing product lines is an issue.
The Bulk Drug Manufacturers Association (BDMA), which has over 500 members including 250 from Andhra Pradesh, has decided to request the Union government to allow drug manufacturers to change product lines without having to apply for a new licence. It is currently mandatory for drug manufacturers to seek fresh permission every time they want to change formulations.
BDMA President M Narayana Reddy told Business Standard that drug compositions were dynamic and consumers shifted to new drugs with added features in a very short span. However, officials insisted on a new licence for changing a formulation. This resulted in loss of time for companies and therefore reduction in the shelf life of some chemicals.
“Change in a formulation will not increase the pollution load of a company,” he said, explaining why the BDMA has decided to take up the matter with the government. It would also consider the legal recourse available, as interpretation of pollution norms was subjective and a technical matter.
Reddy said pollution norms were changing continuously due to different interpretations. “Many bulk drug manufacturers are small scale industries and it is not viable for them to adopt new processes continuously,” he said. The government should encourage small units by setting up more effluent treatment plants. Revenues take a hit when production is halted, he added.
However, Andhra Pradesh Pollution Control Board senior environmental engineer T Rajendra Reddy said companies should aim for zero discharge to be easy on the environment. “Bulk drug manufacturing companies are recognised as red hazard companies by the Ministry of Environment and Forests. They are among the companies causing high pollution,” he said.
“Companies should upgrade processes to reduce the concentration of total solvent dissolved before sending it to the common effluent plant. We cannot allow them to pollute in the name of making drugs,” he said, adding that the board has served notices on several companies for violating the pollution norms, and would continue to do so. Depending on the scale and size of operations, it would require companies to spend about 10 to 20 per cent of their turnover to upgrade their processes, he said.
With margins spread thin due to increased investments, a significant number of bulk drug units were now turning to formulations for higher margins. In an effort to cope with the competition, firms were migrating to Uttaranchal and Himachal Pradesh, which were extending tax exemptions. About 30 companies have already set up plants there, since there were was no excise duty or sale tax for formulations.
Also, many drug companies were unable to increase capacity, since the Andhra Pradesh government had banned expansion of existing bulk drug companies and setting up of new units in Hyderabad, Ranga Reddy, Nalgonda, Medak and Mahabubnagar districts in the state, said Reddy.
According to the BDMA, some units had also been hit by the financial crunch and the slowdown. They had used up raw material buffer stocks, diluting the supply chain. As a result, business has come down by 20 to 30 per cent, in both domestic and international markets. The industry was expecting that conditions would improve in about three months.
The industry is now thriving on imports of raw materials and intermediates from China and Iran. At least 50 per cent of the input requirements were met by imports. Similarly, about 50 per cent of the production of BDMA members, estimated at Rs 15,000 crore, is exported.
Bulk drug manufacturers see a business opportunity arising when many drug patents expire next year. “The effort is to be cost-efficient and competitive in the off-patent regime and the effort is to upgrade processes and to increase the quality and range of products,” said Reddy.
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