Govt eyes bulk purchase to shore up drug exports

Pharma exports rose by 2.9% in 2017-18 to $17.27 billion

To boost pharmaceutical exports, the government is eyeing bulk purchase orders from government procuring bodies and institutions from across the developing world.

Pharma exports grew in 2017-18 by 2.9 per cent, up from a marginal 0.2 per cent rise the year before. Policymakers want a diversified geographic reach.

With this in mind, the government has invited around 100 government procurers, drug regulators, and nongovernment bodies from scores of countries to attend a mega pharma conclave with major domestic players from the industry, beginning Tuesday.

This two-day international exhibition of pharma and health care is being organised by the Pharmaceuticals Export Promotion Council of India (Pharmexcil) and the commerce ministry. It will have 350 exhibitors and 600 foreign buyers.

“The large number of procurement agencies that have been reached out to, from nations across the African continent and those from Central Asia, will help to create a base for exports in newer markets with significant growth potential,” said a senior commerce ministry official. These bodies mostly buy vaccines from India for public health programmes. This country is also a source of choice for the World Health Organization, which, according to industry estimates, buys 65-70 per cent of its vaccines from here.

After remaining in negative territory for the first five months of the past financial year, exports from the sector saw year-on-year increase since November 2017. Though the cumulative data for 2017-18 showed a modest 2.9 per cent growth to only $17.3 billion from $16.8 billion in 2016-17, annualised shipments rose between 7 and 14 per cent since November, says Pharmexcil.

This was despite a slowing in business with America, which takes the largest share of pharma exports from India, at 29 per cent. The North American market accounts for about a third of India’s

exports in the sector. Latest statistics show exports to the Commonwealth of Independent States, centred on the Central Asian region, expanding by 17 per cent, though the base is low. Even so, industry insiders said growth should have been higher in a year when India’s outbound trade managed to rise above the $300 billion annual target after two years, spurred by a rise in global demand.

“The good news is that formulations and bulk drugs, together over 90 per cent of our pharma exports, have shown a sharp turnaround, being led by several

important markets, including Europe,” said Udaya Bhaskar, director-general of Pharmexcil. “After discussing with member companies and data analysts, we estimate our exports would grow to $21-22 billion by 2020.”

However, unlike other sectors, pharma does not suffer from a lack of investment. Major companies with enough cash flow dominate the sector. However, “we are mostly manufacturing off-patented products. With regard to creating new patents and innovation, we have not been that serious,” Bhaskar added.