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An industry under stress. It would not be wrong to describe the Pharmaceutical industry in India in this manner. Of course, the brave faces of the industry leaders may not betray this fact. However, given the plethora of Warning Letters and Import Alerts that various leading players in the industry have received over the last 3-4 years, undoubtedly, questions are bound to be posed to the firms in the sector. While domestic business has continued unabated, manufacturing for exports has taken a hit from the increased scrutiny by the US FDA officials. One begins to wonder whether firms in India have been blatant violators of current Good Manufacturing Practices (cGMP). Surely it cannot be, so everyone agrees. But, if the conspiracy theorists are ignored, the fact remains that there are challenges of compliance and building a consistent culture of quality.
While the stock market has seen major swings in recent months, amongst the worst affected are large Pharmaceutical companies, where at one point in 2015, the combined fall in their market capitalization was over Rs. 99K crores. This was the consequence of increased US FDA scrutiny on market leaders like Sun Pharmaceuticals, Dr. Reddy's Laboratories, Wockhardt, Cipla, and many others. Analysts have maintained that the intrinsic capabilities of the major players is not in doubt but what is essential is the ability to quickly bounce back from such setbacks.
A lot is at stake. Reports indicate that firms from India add up to around 30% (by volume) and about 10% (value) in the $70-80 billion US generic market, thus making Indian firms a significant presence in the generic Pharmaceutical market in the United States.
Let us keep in mind that almost all industries face adverse public scrutiny from time to time - two industries notoriously in the news often are the Auto firms (with product recalls) and the Financial sector (with heavy penalties for non-compliance being the order of the day every other year). The Pharmaceutical industry should not become the next whipping boy of regulators. The nature of the industry is such that their products and services are quite literally seen as contributing to individual well-being & public health. Adverse notice from regulators - and consequent bad press - not only impacts the financial bottom-line of a firm but also erodes confidence in the industry as a whole. This is bad news for the Pharmaceutical sector of India as reports indicate that the hit to the industry is already over Rs. 1 trillion!
This is a complicated landscape right now - and made more so given the unique technological challenges of the Pharmaceutical business (decade long investment in the innovation cycle to bring new drugs to the market, an emotive regulatory environment and constant pressure of rising costs, to name a few). Surely, a cause worth fighting for?
For many decades this is one sector identified with 'Make in India'. Isn't it time to unleash the human capital of this sector to build and enhance a culture of quality all across? Let the industry leaders mull over it and make this an important part of their agenda.
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