South-based trade bodies lead the way

The small and medium sized players of Southern India uniting together have formed their trade bodies, which act as their representatives in various issues and negotiations. K Deepalakshmi finds out the role of these south centric bodies

Southern states are emerging as new destination for pharma trade. Each of the four state has carved a niche by specialising a segment. The support extended by the State Governments play a major role in it. "Each state is doing well in one or more segments," observes Dr PV Appaji, Executive Director, Pharmexcil, Hyderabad. While Andhra Pradesh excels in bulk drugs manufacturing, Bangalore is concentrating on clinical trials and clinical research whereas Chennai has good potential in formulation and Kerala is promoting Ayurveda and herbal products.

Steady growth cannot be possible without the support of the government. This kind of support can be earned when the grievances are taken to the right ears, through unity. This is the prime reason for the birth of many trade organisations and associations, both at regional and national levels. Of them, the regional ones have a more active role to play, as demand and solution could vary in different states. South India has given birth to several pharma and allied trade bodies, in recent times. These bodies have managed to establish themselves in a short span of time.

Birth of Trade Bodies

K Duraikkannan, General Secretary, CIPMMA

Many south based trade bodies came into existence mainly because southern players felt they were not given due recognition at national level. Bulk Drug Manufacturers Association of India (BDMAI), for instance, was established in 1991 in Hyderabad. "Andhra had sizeable small and medium sized bulk drug manufacturing industries. BDMAI was formed to represent them," says M Narayana Reddy, President, BDMAI. Though started in Hyderabad, BDMAI has grown to be a national body representing bulk drug manufacturers across the country.

A more recent inclusion in the list of pharma bodies is Consortium of Indian Pharmaceutical Manufacturers and Marketers Association (CIPMMA). Started in February 2008, CIPMMA now has 350 members across Tamil Nadu. "CIPMMA was formed in order to be a guiding light for the emerging regional based small and medium pharma manufacturers and marketing companies," says K Duraikkannan, General Secretary, CIPMMA. The association hopes to attract membership from other parts of India and intends to be a national body in future.

Objective

Each association comes out with an objective soon after its inception. The objective, though framed in different words, has a common meaning - to be a common platform to fight out the common challenges faced by the segment. This could be anything like fighting a legal tangle, negotiating with the government, resolving disputes between the companies, creating awareness on policies, educating the members with the latest in the field and so on.

The need for such association is felt even by the government. Ministry of Commerce set up a separate council for pharma industry called Pharmaceuticals Export Promotion Council, (Pharmexcil) in 2004. Previously, pharma industry came under Chemexcil. "Government of Andhra Pradesh provided a corpus fund of Rs three crores, which resulted in setting up of Pharmexcil in Hyderabad," says Appaji. Pharmexcil organises trade delegations, assist in overseas enquiries, conducts periodical seminars, suggestions to government on policy decisions. It conducts international conferences every year. Bulk drugs and its intermediates, formulations, herbal, ayurvedic, unani and homeopathic medicines, biotech and biological products, diagnostics, surgicals, neutraceuticals, and pharma industry related services, collaborative research, contract manufacturing, clinical trials and consultancy come under the purview of Pharmexcil.

Representation

These associations represent their members in expressing their views in policy decisions of government. In case the issue needs the attention of concerned government officials regarding any specific needs, these bodies take the necessary steps. They have succeeded in fulfilling the demands too.

Concerned about rising pollution, Government of Andhra Pradesh made it mandatory to have environmental clearance for setting up of industries, including pharma companies. "There were no clear rules for existing companies and many small companies did not apply for clearance," recalls Reddy. When the matter went to court, BDMAI stood up for these pharma companies. After two months of court proceedings, BDMAI managed to get environmental clearance for all existing players. "Similarly we ensured free distribution of methanol for pharma needs by exempting it from licensing," he adds.

Another notable battle fought by trade bodies is the issue of excise duties. Excise duty of 16 percent was imposed on pharma products. This reduced the profitability of small and medium players. In addition to this, the creation of excise free zones posed an additional threat to south based companies, since it increased competition. Trade bodies took up the issue, negotiated with the government and the duty is now reduced to eight percent. While this concession provided some immediate relief, the trade bodies expect more. "Special benefits like reduction of excise duty and increase in the limit of the Excise free clearance and to maintain the existing system of licensing system at state level would help in flourishing pharma trade in Tamil Nadu," says Duraikkannan.

Education

These trade bodies play a major role in informing and educating their members on latest advances in the pharma industry. They also act as forums to discuss various policy pertaining to pharma and its effects on the trade. Indian Pharmaceutical Association (IPA), a national body for pharmacists has its branches in all Indian states.

The Secretary of Tamil Nadu Branch, J Jayaseelan says, "The spectrum of IPA activities includes organising continuous education and training programmes, promoting good pharmacy practice, updating knowledge in technology, trade, research and regulations." Tamil Nadu branch alone has over 2000 individual members and about 450 active members who organise and conduct such programmes.

In addition to educating pharmacists, IPA conducts awareness to general public too. "Many still think pharmacist are those who sell drugs in pharmacies. We intend to educate the public on the entire gamut of pharma and its allied trade. Showcase pharma as a prospective career option," says Jayaseelan.

They conduct Pharmacist Week in the month of October as an awareness programme for public. Seminars are conducted for the members every alternate month. "State Government too seek our opinion when it intends to bring new amendments our acts, relating to pharma," he points out.

National Unity

Issues relating the pharma trade is just not regional. Some policy decisions of the Union Government too could directly or indirectly affect them. Thus, Confederation of Indian Pharmaceutical Industry (SSI) came into existence. Known by the accronym CIPI, it was started in 2004 as an apex body of small scale manufacturers of drugs and pharmaceuticals in the country. Around 7000 units of regional trade bodies are its members.

Keeping in mind the small scale industries, CIPI works to safeguard the interest of these companies. "Small scale industries are facing a tough challenge from bigger players. Some of them have even ceased their operation. The intention of our association is to protect these industries," says TS Jaishankar, Chairman, CIPI.

When the government decided to withdraw 294 drugs from the market, CIPI obtained a stay order from Madras High Court. The decision was reviewed and only 52 drugs were withdrawn now.

Regional bodies - pros and cons

The regional bodies have undoubtedly helped their members but do they actually help in the growth of pharma industry as a whole? The older organisations like OPPI or IDMA, headquartered in Mumbai helped in the development of pharma trade. This also led to the concentration of pharma industries in the Western India.

That is why, the players in other regions felt the need for a regional organisation. This could again confine the industries to a particular region. These bodies sometimes have a limited focus on national issues. "This could send wrong information of lack of unity in pharma trade," fears Jaishankar.

There cannot be a second opinion on meeting specific needs. But overall unity should also be taken into account. Hence, a federal approach is needed in these associations where regional interest should not override national concerns.