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Telangana sees huge expansion in drug manufacturing

A Raju, Hyderabad
Tuesday, September 28, 2021, 08:00 Hrs  [IST]

Telangana has witnessed a flurry of activities in its pharmaceutical sector after the onslaught of Covid pandemic.

The Covid-19 pandemic has in a way turned out to be a blessing in disguise for the pharma sector in Telangana as more than 93 firms from across India have expressed their intent to expand particularly in the bulk drug manufacturing and formulation segments. Most of these units are coming up in districts of Nalgonda, Siddipet, Kamareddy and Mahabubnagar which are located within the striking distance the capital city of Hyderabad.

According to Dr P V Appaji, former director general of Pharmexcil, the sharp surge in Covid-19 cases during the first and second wave in Telangana had increased the demand for medicines and this has prompted many pharma firms to expand their production lines. However, the main driving factor for the expansion of active pharmaceutical ingredients (API) and bulk drug manufacturing is the central government’s production linked incentive scheme.

The strained border relations between India with China lead to a sudden stoppage of API imports from China. To overcome the shortage, the Indian government brought in the production linked incentives. This induced several pharma companies in and around Hyderabad to establish new bulk drug manufacturing units and a few of them decided to expand their existing production lines. With this the pharma sector in Telangana and in Andhra Pradesh witnessed a boom in the drug manufacturing business.

“As per the latest guidelines issued by the state government and the department of pollution control board, any new pharma unit will have to be set up outside the outer ring road (ORR) limits to check the environmental pollution. Even though many pharma firms are eager to set up their new units, the stringent environment regulations are becoming a major roadblock for the firms putting them in a hesitation mode. The recent green tribunal’s verdict to deposit one per cent of the overall turnover of the firm as corpus fund toward environmental protection is becoming a major stumbling block for many firms,” observed P Eshwar Reddy, executive director (ED) of Bulk Drug Manufacturers Association (BDMA).

As per the statics from the Pharmaceuticals Exports Promotion Council of India (Pharmexcil), the Indian pharma exports had increased by 15 per cent in 2020-21 compared to 2019-20. “Compared to last year the pharma exports have significantly improved during the pandemic. Out of top nine companies that supplied medicines to various parts across the globe, Dr Reddy’s Laboratories and Aurobindo Pharma from Hyderabad excelled in global exports,” informed Uday Bhaskar, director general of Pharmexcil.

In fact, during the Covid-19 pandemic in Telangana, after the agriculture sector, it is only the pharma sector that did brisk business in the state. Many industrial experts credited the performance of the pharma sector to the central government’s product-linked incentive scheme. “The main objective of the scheme is to decrease API dependency on China. Formulations are also given incentives now,” observed the Pharmexcil DG.

However, industry experts feel that even though the central government’s production linked incentive has helped a few companies to come and invest in the bulk drug manufacturing sector, the state government should also announce incentive schemes for capital markets to promote innovation.

With the pharma city and already existing pharma and bulk drug manufacturing base, Hyderabad has now emerged as global hub for finished dosage forms and bulk drugs in India.


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