Small drug firms explore semi-regulated markets

The small- and medium-scale pharmaceutical manufacturers in India, currently facing survival threat due to unfavourable business environment in the domestic market, will soon explore exports and contract manufacturing opportunities from the less and semi-regulated markets of Africa, Latin American Countries, Association of Southeast Asian Nations (ASEAN) and Commonwealth of Independent States (CIS).

With a view to help the 4,000-odd small pharmaceutical manufacturers enter these markets, the Indian Drugs Manufacturers Association (IDMA) and the Pharmaceutical Export Promotion Council (Pharmexcil) are planning to jointly promote these regions as 'focus markets'.

Soon, the two associations will launch a major campaign to educate and help the SMEs tap the opportunities available in these markets. Initially, plans are to organise seminar-cum awareness programmes in Mumbai, Chennai, Kolkota, Ahmedabad and Delhi for the firms located in the respective regions.

Experts will detail on the current market situation in these countries, regulatory norms for drug registrations, opportunities in various markets, market trends of target countries and guidelines on export strategy to the select countries.

Pharmexcil has developed specific country-wise reports on many of these markets, and this will be circulated to the firms interested in exports, informed Pharmexcil sources.

"The major pharmaceutical companies in India are now focussing on exports to high value-high risk regulated export markets of the US and Europe. The revised Schedule-M rules, enforced by the government mandating WHO-GMP (Good Manufacturing Practices), have made the Indian SMEs eligible for export approval in many semi-regulated countries. This is an opportunity for Indian companies to tap the potential in these markets," says S V Veeramani, vice-president of IDMA and chairman, SME panel of Pharmexcil.

Another strategy is to help the SMEs utilise the recently revised Market Access Initiative (MAI) scheme of the ministry of commerce and industry. The scheme offers financial assistance to SMEs with less than Rs10 crore to avail financial assistance for setting up showrooms or warehouses, product registration of drugs and participation in trade fairs in the focus countries.

The scheme is made available through Pharmexcil. Though about 1,000 small and medium pharma companies have membership with Pharmexcil, less than 500 are currently active in exports, according to sources.

Sources said the South East Asian market alone was poised to grow by leaps and bounds in near future. Taiwan's pharma market is growing at 6.79 per cent, and expects to reach $4.59 billion mark by 2010. Philippines is growing at 8.5 per cent to $1.71 billion market, Vietnam at 14.17 per cent to $0.9 billion and Singapore at 6.7 per cent to $0.36 billion. Thailand's pharmaceutical market is poised to grow from $1.66 billion to $2.5 billion and that of Malaysia to $0.68 billion by 2010.

Among the CIS countries, Russia alone accounts for about $4 billion market, and is growing at about 15 per cent every year. Ukraine, the second largest CIS pharma market is currently dominated by exports from Europe. Other major pharma markets in the region include Kazakhstan, Kyrgyzstan and Azerbaijan.

The pharmaceutical market in Latin America is worth $41 billion and is expected to grow into a $63 billion market value by 2012. The market in Argentina is valued at $4.7 billion, Brazil at $13.6 billion, Chile at $1.5 billion and Colombia at $1.8 billion. Mexico, the leading Latin American pharmaceutical market, is valued at $14.1 billion, while Peru and Venezuela accounts for $1 billion and $ 4 billion respectively.

According to the latest IMS Health data, prescription drug sales in Latin America grew 12.7 per cent to $33.6 billion, while in Asia Pacific (outside Japan) and Africa, it grew by 10.5 per cent to $66 billion.

"Indian small- and medium-scale manufacturers should tap the opportunities in such export markets aggressively. We are also trying to tie up with small- and medium-scale manufacturers in China for joint research and marketing opportunities," says T S Jaishankar, chairman of Confederation of Indian Pharmaceutical Industry (CIPI).

According to Veeramani, IDMA will soon circulate a questionnaire among its members to assess the strengths and areas of specialisation in manufacturing. The details will be made available online to help the manufacturers get contract manufacturing opportunities for the focus markets.