Pharma exports growth from Gujarat may dip 2-3% in FY14

Major reasons behind the dip are several exporting units coming under the USFDA scanner, apart from slowdown in bulk drug exports

As pharmaceutical exports from the country go on a slow lane, exports from Gujarat, which contributes to almost a quarter of the national pharma exports, is also likely to decline by 2-3 per cent this fiscal.

Industry insiders claim that the major reasons behind the dip in export growth are several exporting units coming under the US Food and Drugs Administration (USFDA) scanner, apart from slowdown in bulk drug exports. Pharmexcil sources indicated that while the target was to clock a 15 per cent growth in pharma exports, from what it looks like, pharma exports would manage to register a 10-12 per cent growth over last fiscal.

India had exported pharmaceutical products worth Rs 79,500 crore in 2012-13, and Gujarat had a 22 per cent share of the national pharma exports. R S Joshi, executive secretary of the Indian Drug Manufacturers Association (IDMA), Gujarat State Board, said that, "Gujarat had a 22 per cent share in national pharma exports last fiscal, however, this year, there is likely to be a slowdown in growth. Exports growth can fall by 2-3 per cent as per recent estimates."

He explained further that after the Centre has implemented the new Drug Price Control Order (DPCO) in 2013, several countries in Africa have started negotiations with Indian drug exporters to reduce prices. "Many African countries have demanded that they want to lower import prices in the light of the recent lowering of prices in India. Arguing that if Indian companies can sell drugs at a lower price in their own country, they could also offer cheaper drugs for export. In this tussle, exports have taken a hit," Joshi claimed. A Ministry of Commerce strategy report on exports says that, "India's pharma exports growth is coming from North America and Africa. The growth rate, however, is in single digit in the major markets of European Union, Latin American Countries (LAC) and Asia."

Daara Patel, secretary general of IDMA too admitted that overall exports from the country would be on a slow lane this year. "The situation is not very good, and export growth is indeed likely to decline," he added.

Pharmexcil sources said that they have also written to the ministry of commerce raising their concerns about slowdown in exports growth and that the ministry is trying to analyse the situation. "One-fourth of India's drug exports are from the US at the moment. With several companies' manufacturing facilities coming under the scanner exports to that country has been hit. Plus, some CIS countries like Russia are now showing reluctance in giving long term approvals, in order to boost their indigenous industry," the source said. He, however, said that data is yet to be collated on a country-wise basis.

Big pharma like Ranbaxy, Wockhardt, RPG Life Sciences, Aurobindo Pharma and Strides Arcolab have received import alerts from the USFDA or approvals have been withdrawn from specific facilities. Over 20 drug manufacturing facilities across the country have been barred from supplying to the US so far this year.