Dissertation - Divya Agarwal

ANALYSING LINKAGES BETWEEN STAKEHOLDERS OF A
CLUSTER
Dissertation (I) submitted to School of Business for the partial fulfilment of the degree of
BBA Foreign Trade

2018-2021
Guided by:
Dr. Rajeev Sharma
Assistant Professor (Department of Economics
and IB)
School of Business, UPES
Dehradun – 248007
Submitted by:
Divya Agarwal
R122218017
500070664
SCHOOL OF BUSINESS
UNIVERSITY OF PETROLEUM AND ENERGY STUDIES,
DEHRADUN, UTTARAKHAND, INDIA
NOVEMBER 2020
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Table of Content
Contents Page
Number
Chapter 1
1.1- Problem Statement
1.2- Background
Chapter 2 Literature Review
Chapter 3
3.1- Research Objectives
3.2- Scope of Research
3.3- Research Methodology
3.4- Sources of data
Chapter 4
4.1 Pharmaceutical sector of world
4.2 Pharmaceutical sector of India
4.3 MSME sector of India
4.4 Cluster of Dehradun
4.5 Cluster stakeholders and their linkages
4.6 Impact of covid 19 on Global Pharmaceutical sector
4.7 Impact of Covid 19 on Indian Pharmaceutical sector
Conclusion
Bibliography
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Table of Figures
Figure Number Page Number
Table 1: BDS areas and their key issues
Table 2. Products in Allopathic and Ayurvedic
Category
Table 3: Products in Allopathic Formulations
Picture 1 & 2: Products (Tablets and Capsules)
and Store house for raw material
Picture: 3 & 4: Flavor for Syrups & Packaging
material
Picture 5: Tablets
Table 4: Profile of cluster
Picture 7: Manufacturing process for capsules
Picture 8: Manufacturing process for Tablets
Picture 9: Manufacturing process for Liquid
Orals
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Chapter 1
1.1 Problem Statement
MSME cluster in the belt of Haridwar-Dehradun-Roorkee involves various stakeholders. These

stakeholders have linkages and it is being identified in the report that whether these linkages help the
cluster to grow or not.
1.2 Background
Discovering, developing and manufacturing of the generic drugs, biotechnology products, orphan drugs,
next generation cells and gene therapies, biosimilars, personalized medicines and technology related to
medical, by public and private organizations. It is basically a source of innovation in the medical field
and thus is considered as the most important sector worldwide. The fundamental aspect of this industry
relies upon heavy research and development. As health care is directly related to the growth of this
sector. Researching and developing new vaccines and drugs to cure the diseases as discovered leads to
the growth in the sector. That’s why most of the pharmaceutical companies heavily invest upon the
R&D.
Also, considering another perspective of this sector, the spending on the pharmaceutical sector is also
rising across the globe. Although per person spending varies from country to country, but if analyzed on
average global perspective, overall health care spending has increased. As mentioned, an estimate in a
report, the compound annual growth rate for health care spending across 60 countries was expected to
increase 5.4% for 2018-22 as compared to 2.9% in 2013-17.1
To keep this rate of health care spending increasing, the pharmaceutical companies need to do the
highest expenditure on research and development. The expenses on the R&D is considered as important
metric for this industry, as it leads to developing of new drugs and simultaneously improved treatment
of diseases. Companies are constantly looking for increasing the efficiency in this sector and decrease
their cost on R&D. As the companies are looking to rely more on the big data and predictive analytics.
So, the Deloitte report of 2019 published the estimate decrease of 1% on R&D worldwide. R&D along
1
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx-lshc-ls-outlook-
2019.pdf (Deloitte, 2019)
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with marketing in this sector is growing in the emerging economies and their market grew by 11.4% in
Brazil, 7.3% in China, 11.2% in India, 5.0% in top 5 European Union markets, and 7.8% in US.2
This field involves expertise in advanced technologies and that adds up-to more of cost. Companies
need to maintain profitability to survive, and for that they require best alternatives for certain areas of
market and focus on their core competencies. So, the big pharmaceutical companies do various deals
looking for profitability such as, licensing, Mergers & Acquisitions, outsourcing or joint ventures.
The increasing competition and pressure to reduce the price put a real challenge to these companies.
Moreover, R&D Failures and high cost is another factor of complexity in this sector. So, M&A provides
a means for profitability to those companies having high amount of cash reserves.3
To reduce this cost in artificial intelligence, robotics, machine learnings and Internet of things, more of
the big pharmaceutical companies prefer to outsource to experts in this regard. Partnering with contract
research organizations, they tend to increase their R&D capabilities and decrease their costs. Moreover,
partnering for outsourcing of global supply chain with contract manufacturing organizations is also an
important strategy for maintaining efficiency in this field. Supply chain is the backbone of pharma
companies, still it is underutilized and inefficient on global level.4
Broadening the sector into the specific products and observing their growth on global level. Japan is the
leading country in the biotechnology products. After the commencement of pharmaceuticals and
Medicals Devices Act, 2014 in Japan, it has turned out to be leader in regenerative medical products. 5
US Food and Drug Administration (FDA) was the first to give consent for CAR-T immunotherapies.
Europe and India have satisfactory market of biosimilars, and have 73 and 50 approved biosimilars
respectively.6 Generic drugs consists of the fundamental market of this sector and US is preeminent
across globe. Over 2018–2024, US$251 billion in drug revenues are at risk from patent expiries with
established pharma giants likely to struggle to compete against generics. 7 As far as personalized
2
https://www.efpia.eu/media/412931/the-pharmaceutical-industry-in-figures-2019.pdf (MIDAS, 2019)
3
https://www.pharmasalmanac.com/articles/ma-fundamental-to-pharma-industry-growth (Alvaro, Challener, & Branch,
2020)
4
https://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/assets/pharma-2020-supplying-the-future.pdf (PWC,
2020)
5
https://www.eiu.com/industry/healthcare/asia/japan (Industry Report, Healthcare Japan, 2018)
6
https://www.ema.europa.eu/en/medicines/field_ema_web_categories%253Aname_field/Human/ema_group_types/
ema_medicine/field_ema_med_status/authorised36/ema_medicine_types/field_ema_med_biosimilar/
search_api_aggregation_ema_medicine_types/field_ema_med_biosimilar (European Medicines agency, 2020)
7
https://www.evaluate.com/thought-leadership/pharma/evaluatepharma-world-preview-2018-outlook-2024
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medicine is concerned, it requires advanced technology and artificial intelligence, thus requiring more
capital.
India’s domestic pharmaceutical market turnover reached Rs. 129,015 crores (US $18.12 billion) in
2018, growing 9.4 percent year-on-year (in Rs) from Rs116,389 crore (US $ 17.87 billion) in 2017. 8 It is
the fastest growing industry of India and accounts for the highest exports from the country. It is also
considered to be the major destination for the manufacturing of generic drug and its share is expected to
continue increasing. Due to the lower cost of production, India gives competitive edge for companies to
invest in it. Along with that, more other advantages attract pharmaceutical investment in India, such as
allowance of 100% FDI under automatic route in this sector through government. Exports from India
also mainly constitutes generic drugs and it accounts for 20% of the world’s export (of generic drugs),
having key market of US. Being the country with more than 162 US-FDA compliant plants, 1400
WHO-GMP approved pharma plants, 253 European Directorate of Quality Medicines (EDQM)
approved plants; India has become proficient.9
Government of India is also supporting and promoting the growth of this sector. By providing the fiscal
benefits to the manufacturers in R&D sector.
Pricing of the drugs in India is controlled by DPCO (Drug Price Control Order). There are various other
departments as well for ensuring the standardization of drugs, controlling the quality and import
licenses; such as, Indian Drugs and Pharmaceuticals Limited, Bureau of Pharma PSUs of India, National
Institute of Pharmaceutical Education Research, etc.
There are also various industry associations operating in India, such as, Bulk Drug Manufacturers
Association, Federation of Pharma Entrepreneurs, Indian Drug Manufacturers’ Association (IDMA),
Indian Pharmaceutical Alliance, Organization of Pharmaceutical Producers India (OPPI) and
Pharmexcil.10
Government of Uttarakhand is also supporting and creating favorable environment for industrial set up
in the state. The state is accounting for approximately 20% of the domestic requirement. The industrial
area in Uttarakhand for pharmaceutical sector is in Selaqui, Dehradun. With well developed
infrastructure, it is spread across 50 acres and provide employment to many.
8
IBEF Report (Aranca, 2019)
9
https://pharmaceuticals.gov.in/pharma-industry-promotion (Centre, 2017)
10
https://pharmaceuticals.gov.in/agencies-under-department
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Moreover, many factors are considered for making it ideal investment decision, like, availability of
cheap and reliable power, abundant availability of good water resources, skilled manpower availability,
provided sector specific policies and most important good law and order which enables hassle free setup
and operations in the state.11 Along with these factors, initiatives from government also plays a
significant role for boosting industrial sector in the cluster. For instance, Cluster Development
Programme for Pharma Cluster (CDP PS), Pharmaceutical Promotion Development Scheme (PPDS),
incentives mentioned under MSME industrial policy, etc.
The main association working with Dehradun Pharma cluster is Drugs Manufacturing Association.
For utilizing the full capacity and infrastructural benefits from this cluster, still a lot of efforts are
needed to develop this cluster. Since, most of the cluster is occupied by MSMEs, government
institutions and associations need to focus more on this cluster.
11
https://investuttarakhand.com/themes/backend/uploads/IP-UK%20Pharma%20Sector%20Profile%202018_09_05.pdf
(Invest Uttarakhand, 2019)
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Chapter 2: Literature Review
(Pulse, 2014)
With a view to enable Indian MSMEs to enhance their competitiveness, SIDBI has initiated a project to
carry out the diagnostic study to understand the pain points of the pharma industry of Dehradun to foster
MSMES growth, competitiveness and employment creation.
The MSMES sector in India has emerged as the engine of economic growth by contributing
significantly towards industrial production (45%), exports (40%) and employment generation (110
million) – the second largest source of employment after agriculture. Notwithstanding the same, such
growth of MSMEs sector is considered much below its potential growth rate.
SIDBI has been actively involved in developing the industry clusters over the past decade through
various interventions like its BDS Development project in Dehradun. As an extension of the project to
continue the work done and provide momentum to the past activities, a current situation diagnostic
study has been conducted in the Dehradun Pharma cluster.
Cluster Pulse, carried out the diagnostic study of Dehradun Pharma cluster. The objective of this study
is to carry out a detailed analysis of the pharmaceutical cluster of Dehradun with a view to identify non-
financial gaps and suggest appropriate measures to achieve the desired situation. The major focus is on
non-financial issues, infrastructure and marketing. The sampling methodology was suggested by SIDBI
for collecting the information from the stakeholders. The same methodology was followed for meeting
the major stakeholders.
(TERI, 2015)
This document is an output of a research exercise undertaken by TERI supported by the Swiss Agency
for Development and Cooperation (SDC) for the benefit of MSME sector. The major product of the
cluster is allopathic formulation in various dosage forms such as tablets, capsules, liquid orals,
ointments and injectable. The cluster falls within the Doon valley region, as such the production of bulk
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drug is restricted by the state environment protection and pollution control board. The tablets are
produced by direct compression, dry granualation and wet granualation process.
(Invest Uttarakhand, 2019)
There are more than 300 pharmaceutical units engaged in manufacturing in Uttarakhand, majorly
located in Selaquoi Haridwar and Udham Singh Nagar. Currently Pharmaceutical sector employs more
than 1 00 000 people in Uttarakhand. Currently, the Pharmaceuticals Industry of Uttarakhand is catering
to around 20 of country’s domestic requirement Uttarakhand state is on a track of becoming global
Pharma hub. With Uttarakhand State`s focus on pharmaceutical and infrastructure investments, pharma
majors have made their base in Uttarakhand. In order to facilitate Pharmaceutical industries in the State,
with well developed infrastructure established at Pharma City Selaqui Industrial Area, Dehradun Spread
across 50 acres, with a capital investment of INR 12059 62 Lakhs It is providing employment to more
than 1200 people. Abundant skilled manpower is available in the State. The Uttarakhand Skill
Development Mission trains students for employment under Pharmaceutical Sector with special courses
and industry collaborations.
(Aranca, 2019)
Indian pharmaceutical industry supplies over 5 0 percent of global demand for various vaccines, 40
percent of generic demand in the US and 25 percent of all medicine in UK. India accounts for 20% of
global exports in generics. India’s pharmaceutical extorts stood at US$ 17.27 billion in 2017-18 and are
expected to reach US $ 20 billion by 2020. In 2018-19 these exports are expected to cross US$ 19
billion. Indian health care sector, one of the fastest growing sectors, is expected to cross US$ 372 billion
by 2022. The domestic generics market is expected to reach US$ 27.9 billion by 2020. India’s generics
market has immense potential for growth. Indian pharmaceutical companies received record 300 generic
drug approvals in USA during 2017 where the generic market is expected to reach US$ 88 billion by
2021.
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(Deloitte, 2019)
2019 will continue to see a focus on digital transformation in life sciences. This transformation is about
using technology symbiotically and strategically, not just adopting a particular technology or device.
Data is fast becoming the currency of life sciences, and digital enterprises are building a new business
model for the future. In 2019, how can leaders move forward and accelerate change in life sciences?
They should Focus and Transform.
 Focus on patients and regulators as partners, building partnerships that are strategic and
relationship-driven.
 Focus on external innovation and expanding a richly networked ecosystem.
 Focus on mobilizing data and collaborating with nontraditional partners like startups and tech
giants.
 Focus on outsourcing for advanced technologies and manufacturing capabilities, and choosing
vendors who share similar values and risk profiles
Transforming means aligning the enterprise to deliver an exceptional customer and patient experience,
using data intelligence to create value, and evolving a digital culture and new leadership styles. While
this type of change may be challenging, it is likely to be essential to accelerating change in the year
ahead.
(MIDAS, 2019)
Thanks to advances in science and technology, the research-based pharmaceutical industry is entering
an exciting new era in medicines development. Research methods are evolving and we have many
promising prospects on the horizon – from the possibilities offered by personalised medicines, to the
potential offered by harnessing the power of big data. The innovative pharmaceutical industry is driven
by, and drives, medical progress. It aims to turn fundamental research into innovative treatments that are
widely available and accessible to patients. Already, the industry has contributed to significant
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improvements in patient well-being. Today’s European citizens can expect to live up to 30 years longer
than they did a century ago. Some major steps in biopharmaceutical research, complimented by many
smaller steps, have allowed for reductions in mortality, for instance from HIV/AIDS-related causes and
a number of cancers. High blood pressure and cardiovascular diseases can be controlled with
antihypertensive and cholesterol lowering medicines; knee or hip replacements prevent patients from
immobility; and some cancers can be controlled – or even cured – with the help of new targeted
treatments. European citizens can expect not only to live longer, but to live better quality lives. Yet
major hurdles remain, including Alzheimer’s, Multiple Sclerosis, many cancers, and orphan diseases
(Prasad, 2009)
On 19th September, 2009, a workshop was organized tocreate awareness among the stakeholders about
the action plan for the year 2009-10 and to facilitate interaction among the stakeholders at one place. It
also aimed at providing a platform to make the presence of the project felt in the cluster. Shri. Manoj
Mittal, DGM-SIDBI PMD, Shri A.K. Pandey DGM-SIDBI, Dehradun also participated in the Launch
workshop. CCC members and Association members of SMEs were among other participants in the
workshop.
(Government, Industrial profile of Haridwar District, 2011)
The interventions implemented by APITCO as per the approved Action Plans in the Dehradun Cluster
have shown visible results in the areas of quality, ICT, Energy savings, exports etc. For instance,
Quality compliance in 88 SMEs has been increased and it resulted in these firms getting additional 15%
of the business from the Contract firms. The Cluster turnover has increased by 12% per annum. Around
720 existing technical and non-technical staff were trained in GMP,GLP through theoretical and
practical oriented trainings. These interventions resulted in reduction of internal rejections by 50%,
external rejections by 40% and rework & reprocess by 60%. In the area of ICT, well developed ERP
solutions along with Business intelligence tools were introduced in 10 SMEs which has resulted in
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increased efficiency and productivity by 25%. The interventions in the area of Energy have resulted in
savings of Rs.1.2 crores in Pharma Industry. Out of 40 BDSPs introduced, 25 BDSPs have generated
new business in the industry without project support.
( TOR - Cluster Intervention1, 2018)
The MSME sector in India has emerged as the engine of economic growth by contributing significantly
towards industrial production (45%), exports (40%) and employment generation (110 million) – the
second largest source of employment after agriculture. Notwithstanding the same, such growth of
MSME sector is considered much below its potential growth rate. To work towards addressing the
financial and non-financial issues of MSME clusters in India, SIDBI has carried out studies in 30
MSME clusters hindering availability of adequate and timely institutional credit, infrastructure and
marketing gaps and lack of support services affecting the growth and competitiveness of these clusters.
SIDBI has identified 5 gaps which are common to most of the clusters (a) Skill Development Gap, (b)
Infrastructure Gap, (c) Knowledge Gap, (d) Credit Gap & (e) Policy Advocacy. Apart from these, there
are certain cluster specific gaps which also need to be addressed. As a precursor to the detailed
interventions covering all gaps, SIDBI intends to start a short tem Cluster Level Intervention
Programme (CLIP) covering 2 common gap areas i.e. (i) Knowledge and (ii) Skill Development Gap.
Under CLIP, out of the 30 MSME clusters studied, SIDBI has planned to make intervention in around 5-
11 MSME clusters, spread across various regions /zones.
(EXPORT STRATEGY of Uttrakhand, 2018)
The pharmaceutical cluster is located at about 25 kilometers from Dehradun in Selaqui industrial area.
The industrial is area is spread in about 50 acres of land. The pharmaceutical industries were set up
during 2003-04 when a policy stimulus package including new industrial policy and other concessions
were announced for the state of Uttarakhand, Himachal Pradesh and Jammu & Kashmir to encourage
the setting up of industry in these states and help in creating jobs.
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(Government, Scheme for Cluster Development Programme for Pharma sector, 2017)
The vision of the Department of Pharmaceutical (DoP), Ministry of Chemicals & Fertilizers is to
catalyze and encourage quality, productivity and innovation in pharmaceutical sector and to enable the
Indian pharmaceutical industry to play a leading role in a competitive global market. For this, world
class quality manufacturing facilities with high level of productivity with innovative capabilities are
required. However, these are on one hand very capital intensive and cannot be established and opened
by Pharma Manufacturing Units especially the SMEs at their own due to financial constraints while on
the other hand global level technical expertise is an adverse handicap.
(Sinha & Shukla, 2013)
In the highly regulated pharmaceuticals industry, jobs have become more stressful and complicated.
Fierce competition has driven salaries higher and higher and benefits must be constantly improved.
Although the pharmaceutical industry has lower turnover rates compared to other industries, the cost of
turnover is much greater. With strict regulations and rigid timelines, a research specialist's resignation
leaves your company with a delay in product development and a loss of talent. Additionally, when a
pharmaceutical representative leaf, they take the client relationships with them. These stringent
regulations leave employee actions vulnerable to repercussions from their boss and the government. In
the given scenario this study has been undertaken to understand the major issues associated with the
retention of the pharmaceutical employees in Dehradun city. Another objective is to identify the major
causes of the high level of attrition. The study investigates the influence of HR policies, compensation
and benefits, work pressure and relationship with the superiors on employee retention.
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Chapter 3: Objectives and Methodology
3.1 Research Objectives
 To study the status of MSMEs in Pharmaceutical sector in Dehradun.

 To understand the various linkages with stakeholders and challenges faced by them respectively.
3.2 Scope of Research

Scope of study is confined to the pharmaceutical cluster of Dehradun. The purpose of study is to
analyze the linkages between the stakeholder of the cluster. This study is followed by limitation of
reaching out to every firm in that area due to Covid 19.
3.3 Research Methodology

1) Getting overview of the Pharmaceutical sector worldwide through internet sources
2) Comparing those factors with Indian Pharmaceutical sector
3) MSME’s in Pharmaceutical sector at Uttarakhand
4) Identifying and listing major stakeholders of the sector.
5) Understanding and analyzing linkages
6) Conduct SWOT analysis and identifying the needs of cluster
7) Conclusion
3.4 Sources of Data:
This study comprises of secondary data. Various websites for the pharmaceutical companies in the
Uttarakhand cluster, reports published by development agencies and government shall be the major
sources for this study.
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Chapter 4- Analysis
4.1 Pharmaceutical sector of world

The pharmaceutical industry is responsible for the research, development, production, and distribution
of medications. The market has experienced significant growth during the past two decades, and pharma
revenues worldwide totaled 1.25 trillion U.S. dollars in 2019.
The pharma industry is comprised of some major multinational companies. Based on the prescription
drugs market, Pfizer is one of the world’s leading pharmaceutical companies. The company, which has
its global headquarters in New York City, generated total revenues of around 51.7 billion U.S. dollars in
2019, the majority of which was derived from sales of its products. Other top global players from the
United States include Johnson & Johnson, Merck & Co., and AbbVie.
Many of the leading pharma companies come from the United States, and, therefore, it is no surprise
that the country has the largest pharmaceutical market worldwide. China has become one of the main
players in the industry, and annual growth rates of the emerging pharma market have been strong in
recent years. However, projected pharmaceutical sales show that the established markets of North
America and Europe will still be leading the way in 2023. Some of the biggest European companies are
Novartis, Roche, GlaxoSmithKline, and Sanofi.
More than any other industry, the pharmaceutical sector is highly dependent on research and
development, with some companies investing around 20 percent of their sales revenues in R&D
projects. This share can be much higher at companies that specialize in research and generate low sales.
The discovery of new drugs is vital for the continued growth of pharma companies, and sales of new
branded drugs can provide sizeable contributions to total revenues. However, the loss of patent
protection can have serious consequences, and competition from generic drugs is a major challenge for
companies. The expiration of a product patent can result in a significant reduction in revenues, as
experienced by Pfizer’s Lipitor from 2012 onwards.
A rise in the drug approvals by the regulatory bodies is expected to fuel the pharmaceutical
manufacturing procedures. For instance, the FDA approved 59 drugs in 2018, 49 drugs in 2019, and 15
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drugs up to April 2020. Furthermore, a large number of ongoing clinical trials have created numerous
growth opportunities in the market for pharmaceutical manufacturing.
The research-based pharmaceutical industry can play a critical role in restoring Europe to growth and
ensuring future competitiveness in an advancing global economy. In 2018 it invested an estimated €
36,500 million in R&D in Europe. It directly employs some 765,000 people and generates about four
times more employment indirectly – upstream and downstream – than it does directly. However, the
sector faces real challenges. Besides the additional regulatory hurdles and escalating R&D costs, the
sector has been severely hit by the impact of fiscal austerity measures introduced by governments across
much of Europe since 2010. There is rapid growth in the market and research environment in emerging
economies such as Brazil, China and India, leading to a gradual migration of economic and research
activities from Europe to these fast-growing markets. During the period 2014-2018 the Brazilian,
Chinese and Indian markets grew by 11.4%, 7.3% and 11.2% respectively compared to an average
market growth of 5.0% for the top 5 European Union markets and 7.8% for the US market (source:
IQVIA MIDAS, May 2019). In 2018 North America accounted for 48.9% of world pharmaceutical sales
compared with 23.2% for Europe. According to IQVIA (MIDAS May 2019), 65.2% of sales of new
medicines launched during the period 2013-2018 were on the US market, compared with 17.7% on the
European market (top 5 markets). The fragmentation of the EU pharmaceutical market has resulted in a
lucrative parallel trade. These benefits neither social security nor patients and deprives the industry of
additional resources to fund R&D. Parallel trade was estimated to amount to € 5,408 million (value at
ex-factory prices) in 2017.
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4.2 Pharmaceutical sector of India
Indian pharmaceutical sector is expected to grow to US$ 100 billion, while medical device market is
expected to grow US$ 25 billion by 2025. Pharmaceuticals export from India stood at US$ 16.3 billion
in FY20. Pharmaceutical export includes bulk drugs, intermediates, drug formulations, biologicals,
Ayush and herbal products and surgical. As of November 2020, India exported pharmaceuticals worth
US$ 15.86 billion in FY21. Pharmaceutical exports from India stood at US$ 16.28 billion in FY20 and
US$ 2.07 billion in October 2020.
India's biotechnology industry comprising biopharmaceuticals, bio-services, bio-agriculture, bio-

industry, and bioinformatics. The Indian biotechnology industry was valued at US$ 64 billion in 2019
and is expected to reach US$ 150 billion by 2025.
India’s domestic pharmaceutical market turnover reached Rs 1.4 lakh crore (US$ 20.03 billion) in 2019,
up 9.8% y-o-y from Rs 129,015 crore (US$ 18.12 billion) in 2018.
Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the
generic demand for US and 25% of all medicines for UK. India contributes the second largest share of
pharmaceutical and biotech workforce in the world. India’s domestic pharmaceutical market turnover
reached Rs. 1.4 lakh crore (US$ 20.03 billion) in 2019, up 9.8% y-o-y from Rs. 1.29 lakh crore (US$
18.12 billion) in 2018. In May 2020, pharmaceutical sales grew 9% y-o-y to Rs. 10,342 crore (US$ 1.47
billion).
During December 2019, on moving annual total (MAT) basis, industry growth was at 9.8%, price
growth was at 5.3%, new product growth was at 2.7%, and volume growth was at two% y-o-y.
Indian drugs are exported to more than 200 countries in the world, with US being the key market.
Generic drugs account for 20% of the global export in terms of volume, making the country the largest
provider of generic medicines globally. It is expected to expand even further in the coming years. The
Indian pharmaceutical exports, including bulk drugs, intermediates, drug formulations, biologicals,
Ayush & herbal products and surgical, reached US$ 16.28 billion in FY20. As of October 2020, India
exported pharmaceuticals worth US$ 13.87 billion in FY21. Pharmaceutical exports from India stood at
US$ 16.28 billion in FY20 and US$ 2.07 billion in October 2020.
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Medical devices industry in India has been growing 15.2% annually and is expected to reach US$ 8.16
billion by 2020 and US$ 25 billion by 2025.
Affordable medicines under Pradhan Mantri Bhartiya Janaushdhi Kendra's (PMBJKs) achieved an
impressive sale of Rs. 100.40 crore (US$ 14.24 million) in the first two months of FY21.
‘Pharma Vision 2020’ by the Government’s Department of Pharmaceuticals aims to make India a major
hub for end-to-end drug discovery. The sector received cumulative Foreign Direct Investment (FDI)
worth US$ 16.54 billion between April 2000 and June 2020. Under Union Budget 2020-21, allocation to
the Ministry of Health and Family Welfare stands at Rs. 65,012 crore (US$ 9.30 billion), whereas, Rs.
6,429 crore (US$ 919 million) has been allocated to health insurance scheme, Ayushman Bharat –
Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). In November 2019, the cabinet approved the
extension/renewal of extant Pharmaceuticals Purchase Policy (PPP) with the same terms and conditions,
while adding one additional product, namely Alcoholic Hand Disinfectant (AHD), to the existing list of
103 medicines till the final closure/strategic disinvestment of pharma CPSUs.
Government expenditure on healthcare increased to Rs. 3.24 lakh crore (US$ 45.96 billion) in FY20,
growing at a CAGR of 18% from FY16. As per Economic Survey 2019-20, Government expenditure (as
a percentage of GDP) increased to 1.6% in FY20 from 1.2% in FY15 for health. FDI increased to 74%
in existing pharmaceutical companies and 100% in new projects.
India plans to set up a nearly Rs. 1 lakh crore (US$ 1.3 billion) fund to provide boost to companies to
manufacture pharmaceutical ingredients domestically by 2023.
The Indian pharmaceuticals market has characteristics that make it unique. First, branded generics
dominate, making up for 70 to 80 per cent of the retail market. Second, local players have enjoyed a
dominant position driven by formulation development capabilities and early investments. Third, price
levels are low, driven by intense competition. While India ranks tenth globally in terms of value, it is
ranked third in volumes.
The Indian market is highly fragmented with about 8000 manufacturers. This high competition has
driven Indian companies to reduce costs across the life cycle of a product. Generic drugs, with 71
percent market share form the largest segment of the Pharmaceutical industry in India. The rise of
exports of generics to the US will lead to further growth of generic drugs.
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Contract manufacturing is a strong segment of the domestic market. Indian firms have several
advantages over their Western rivals. The expertise gained in manufacturing generics through reverse
engineering has helped some companies streamline the process for getting manufacturing up and
running. Costs are very competitive; indeed. They can operate on significantly lower margins, given
their low development and labour costs.
The domestic pharma industry expects to benefit from the long-awaited Goods and Services Tax (GST)
in terms of simplified tax structures, supply chain efficiency and decrease in manufacturing cost. It will
enable pharma manufactures to enjoy a level playing field. Besides, manufacturing houses can establish
their warehouses at strategic locations as there will be no necessity to maintain warehouses at certain
states (for CST factor) only. Post GST, there may be increases in prices as expected rate of GST will be
higher than the prevalent tax of five per cent in most of the states. The impact may also be there on free
schemes, physician samples and return of expired medicines, but as per the opinion of experts, the
effects may get neutralised gradually because of other factors involved and there will be a win-win
situation for the drug manufacturers and customers in the long run.
The industry has seen tremendous progress in terms of infrastructure development, technology base and
the wide range of products manufactured. Demand from the exports market has been growing rapidly
due to the capability of Indian players to produce cost-effective drugs with world class manufacturing
facilities. Bulk drugs of all major therapeutic groups, requiring complicated manufacturing processes are
now being produced in India. Pharma companies have developed Good Manufacturing Practices (GMP)
compliant facilities for the production of different dosage forms.
In addition to having GMP, WHO, several Indian companies have also been getting plant approvals
from international regulatory agencies like US FDA, MCA (UK), TGA (Australia), MCC (South
Africa). India possesses the highest number of US FDA approved manufacturing facilities outside the
USA and currently tops in filing the Drug Master Files (DMF) with the US FDA. This has also
facilitated the domestic industry to attract contract manufacturing opportunities in the rapidly growing
generics market.
A paradigm shift occurred in the Indian pharmaceutical industry with India becoming a signatory to the
WTO order, ushering in the Product Patent Regime. Earlier, with the enactment of The Patent Act,
1970, only process patent was applicable for pharmaceuticals.
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With the introduction of the product patent beginning 01-Jan-05, which has now made India TRIPS
compliant, the Indian market has become an attractive option for the introduction of research-based
products. As a result, the Indian companies are now exploring new business models such as contract
research, for drug and discovery research & development, as well as contract manufacturing.
However, it poses a challenge to the generics industry as it would no longer be able to freely continue
with the production of generics of the new patented molecules without license/ payment of royalty to the
innovator company.
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4.3 MSME sector of India
The small and medium enterprises (SMEs) are expected to play a significant role in the growth story of
the country’s pharma sector as they contribute 35-40 percent to the industry in terms of production with
a turnover of about Rs.35,000 crore. There are more than 24,000 registered units, which meet 70 percent
of the country’s needs.
Clearly, MSMEs operating in the domestic pharma sector are recognised as the backbone of the
industry. In terms of number of units and employment generation, the SME sector is at the forefront.
They also support 48 percent of the country’s pharma exports. The Govt also Support the above sector
through various platforms & offering attractive incentives to Exporters.
The ‘Pharma Vision 2020’ by the government’s Department of Pharmaceuticals aims to make India a
major hub for end-to-end drug discovery. The sector has received cumulative FDI worth $15.98 billion
between April 2000 and March 2019. Under Budget 2019-20, allocation to the Ministry of Health and
Family Welfare increased by 3.1 percent to Rs 63298 crore ($9.06 billion). Indian pharmaceutical sector
is expected to grow at a CAGR of 15 percent in the near future and medical device market expected to
grow $50 billion by 2025. The pharma sector will remain the major Industry in India that will contribute
to the Economy of our country in many ways than one.
India has approximately 6.3 crore MSMEs. The number of registered MSMEs grew 18.5% Y-o-Y to
reach 25.13 lakh (2.5 million) units in 2020 from 21.21 lakh (2.1 million) units in 2019. The Indian
MSMEs sector contributes about 29% towards the GDP through its national and international trade.
According to data shared by the MSME Minister in the Rajya Sabha, the registered MSME is dominated
by micro enterprises at 22.06 lakh (2.2 million) units in 2020 from 18.70 lakh (1.8 million) units in
2019, while small enterprise units went up from 2.41 lakh (0.24 million) units to 2.95 lakh (0.29
million) units. Midsized businesses only increased from 9,403 units to 10,981 units during this period.
MSMEs are being encouraged to market their products on the e-commerce site, especially through
Government e-Marketplace (GeM), owned and run by the government, wherefrom Ministries and PSUs
(public sector undertakings) source their procurement. The platform has recorded transactions worth Rs.
55,048 crore (US$ 7.5 billion) until September 2020.
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Domestic business requires a strong financial stimulus with concessional working capital loans to ensure
adequate liquidity is maintained in business operations from the government and financial institutes.
The Government of India has designed various policies for the growth of MSMEs in the country.
 To provide reliable measures and set benchmark to boost and strength the MSME sector in India,
TransUnion CIBIL, in partnership with the Ministry of Statistics & Programme Implementation
(MoSPI), launched the MSME Credit Health Index on November 2, 2020.
 In October 2020, the Ministry of MSME in a major initiative onboarded the latest IT tools of
Artificial Intelligence (AI) and Machine Learning (ML) for providing assistance and solutions to
the Micro, Small, and Medium Enterprises (MSMEs). The ministry has implemented AI & ML
on its robust Single Window System 'Champions’, which was launched by the Prime Minister
Mr. Narendra Modi on June 1, 2020.
 In September 2020, the Government of India constituted five ministerial task forces to make
India’s MSMEs future-ready and formulate a concrete strategy towards making the country a
leading exporter.
 Udyog Aadhaar Memorandum: Udyog Aadhaar Memorandum (UAM) is a one-page online
registration system for MSMEs based on self-certification. The information sought is on a self-
certification basis and no supporting documents are required at the time of online filing of UAM.
 MSME DataBank: MSME DataBank enables the Ministry of MSME to streamline and monitor
the schemes and pass on the benefits directly to MSMEs. It is helpful for MSME units that can
update their enterprise information as and when required without visiting any government office
and updating information about their products/services. Until May 2019, more than 6.1 lakh
MSMEs registered in the databank.
 My MSME: In order to facilitate the enterprises to enjoy benefits of various schemes, the MSME
office launched a web-based application module in the form of a mobile app called My MSME.
This allows enterprises to make their applications and check for schemes on their mobile phone
using the app.
 MSME Sampark: Launched in 2018, the MSME Sampark portal is a digital platform wherein
jobseekers and recruiters can register themselves for mutual beneficial interactions.
 Digital Payment: As part of the Digital India initiative, the Ministry of MSME has taken
numerous initiates to digitally enable the entire MSME ecosystem all MSME offices have been
digitally empowered, efforts have been taken to spread awareness on the benefits of digital mode
of payment such as BHIM, UPI and Bharat QR Code.
 To encourage local production, the government is working on policies to increase MSME
exports and lower imports. In addition, Rs. 200 crore (US$ 28.4 million) scheme has been
sanctioned to set up 12 technology centers, which are expected to be completed by 2021.
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Institutional support
 In January 2020, Tata Power and SIDBI have joined hands to provide a solar financing solution
to help MSMEs garner financial aid without any collateral at an interest of <10%.
 In December 2020, the Federation of Indian Micro and Small and Medium Enterprises (FISME),
a leading industry association for small businesses and a member of the National MSME Board,
conducted educational awareness panels for MSMEs encouraging them to leverage e-commerce
platforms for sustainable growth via export revenues.
 In December 2020, the India Revival Mission eForum was launched where industry experts
came together to discuss revival strategies for bolstering growth of the MSME sector.
 In December 2020, DBS Bank India collaborated with Haqdarshak (a tech platform to transform
how people find out about, apply for, & benefit from government schemes) to assist MSMEs via
the latter’s newly unveiled platform providing MSME-focused government-assisted schemes.
 In November 2020, Sidbi partnered with Tamil Nadu to support MSME ecosystem in the state.
 In November 2020, Dun & Bradstreet Information Services India signed an agreement with the
National Small Industries Corporation (NSIC) to promote, aid and foster the growth of micro,
small and medium enterprises.
 In November 2020, Instamojo partnered with Platform for Artists (PFA), an online portal for
upcoming artists to showcase their work. As a part of this partnership, Instamojo will offer
access to its digital products and solutions for all merchants who are part of the ‘UNSEEN 4.0’,
an online flea market organised by PFA.
 To support requirements of micro and small businesses and help them recover from the
pandemic-induced crisis, Facebook, on November 4, 2020, rolled out a dedicated offline-to-
online ‘SMB Guide’ (Small and Midsize Business Guide) and other resources to help make the
journey frictionless for small and midsize businesses.
In India, MSME are very large in numbers, diverse in type of business and are spread across remote
geographies of a vast country. A large portion of the MSMEs are informal and not registered with the
formal eco system of MSME. It will require significant changes in philosophy and approach to be able
to develop and deliver a new wave eco system which facilitates their development and seize the
emerging domestic and global opportunities. At a minimum, any hindrances and hurdles in doing
business are to be removed. This will help unleash a young and dynamic entrepreneurial talent in India
who will be willing to make self-entrepreneurship the first career choice and develop growth companies.
Seizing the emerging opportunities to develop a robust MSME sector as a strong backbone for a
growing economy will require efforts by the government to bring the various stakeholders i.e. equity
funds, banks and financial institutions, industry sector majors and MNCs, regulators across various
Ministries at the centre and state level and trade associations and global economies having trade flows
with India and others stakeholders, etc, together and create a forward looking framework and eco
system. Further, a holistic approach can be considered in developing new wave MSME in view of the
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emerging opportunity areas in the India economy. Such an approach will be necessary to deliver the
potential. Further, speedy utilisation of the INR10,000 cr4 fund for MSME and the INR200 cr fund for
technology upgradation announced in the recent Union budget can provide an excellent immediate
impetus to the development of MSME. A policy framework can be developed for a seed fund which can
contribute to 25% of the venture and special purpose private equity funds ranging from INR 100 – 500
Cr and focusing specific areas - adopting innovation and technology, digital India, global
competitiveness and so on. Relevant authorities and stakeholders can work together to channelize the
funds
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4.4 Cluster of Dehradun
Dehradun is capital city of the state of Uttarakhand in Northern India. The pharmaceutical cluster is
located at about 25 kilometers from Dehradun known as “Pharma City” in Selaqui industrial area. The
industrial is area is spread in about 50 acres of land. The pharmaceutical industries were set up during
2003-04 when a policy stimulus package including new industrial policy and other concessions were
announced for the state of Uttarakhand, Himachal Pradesh and Jammu & Kashmir to encourage the
setting up of industry in these states and help in creating jobs. The main highlight of the package was
100% excise benefits for the first ten years and income tax benefit for 5 years from the date of
establishment. The units in the cluster are mainly engaged in production of allopathic formulation in
various dosage forms such as tablets, capsules and liquid orals. About 52 pharmaceutical units are
situated in the cluster of which more than 30 units belong to small scale category. About 5 cluster units
come under large scale.
The major product of the cluster is allopathic formulation in various dosage forms such as tablets,
capsules, liquid orals, ointments and injectable. The cluster falls within the Doon valley region, as such
the production of bulk drug is restricted by the state environment protection and pollution control board.
The tablets are produced by direct compression, dry granualation and wet granualation process.
The major energy forms used by pharmaceutical units in Dehradun Pharma cluster include electricity,
LPG and HSD/LDO. Electricity from grid is used for different motive loads in the processing sections,
chillers and air compressors. Thermal energy in the form of steam/ hot water is used for formulation
process and drying. HSD/LDO and LPG is primarily used as the fuel in boiler for generating steam.
Apart from steam generation, HSD is also used in the DG sets to cater the necessary power requirements
during grid staggering.
The major stakeholders include district level and state level industry associations, State Industrial
Development Corporation and development bodies of MSMEs. The major stakeholders in the cluster are
as follows.
 Drug Manufacturers Association

 Industries Association of Dehradun
 State Industrial Development Corporation of Uttarakhand
 MSME-Development Institute, (DI) Haldwani
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Major issues identified APITCO has identified the following issues during the diagnostic study. To
address these issues, Annual action Plans were prepared under BDS Project and approved by SIDBI.
BDS Area Key Issues

Quality Inadequate adoption of GMP practices by majority of the firms
due to which firms due to which they were unable to initiate
exports
HRD Restricted availability of Skilled manpower resulting in low
productivity
Marketing Limited access to export market primarily due to non-
compliance of the quality standards.
Finance Poor credit facility to tide over any urgent / short term Financial
requirements
Pollution and Problem in disposal of hazardous waste and effluents
waste
management
Energy Inadequate adoption of energy saving measures leading to high
management operating cost
ICT Lack of awareness on usage of advanced software
Raw material Few basic raw material and recipients sourced from other states
are very costly. Low quality raw materials being used & its
untimely delivery resulting in less than desired production
efficiency levels.
Infrastructure Non availability of suitable / full-fledged Testing Laboratories
and Training Canters
Table 1: BDS areas and their key issues
With a view to enable BDS market development and make Indian SMEs to enhance their
competitiveness, SIDBI has initiated a Project to provide need-based and demand driven BDS in the
areas of technology, markets, skills, ICT, energy, environment etc. in select clusters. The project funded
jointly by World Bank, DFID, KFW and GTZ, aims at providing BDS through professional
organizations with proven track record in extending demand driven BDS and implementing cluster
development interventions. APITCO was chosen by SIDBI-PMD Division as the Facilitator Agency for
the development of BDS markets in the Dehradun Pharmaceutical cluster. The planned project finalize
for project implementation was 32 months. It had 4 phases viz. a) pre-Implementation, b)
implementation, c) sustainability and d) exit. Foundation for MSME clusters (FMC) was appointed as a
monitoring and evaluating agency APITCO adopted 4 Phase strategy and implemented the project in 32
months.
APITCO has strengthened the BMOs, Institutions and BDSPs to continue the BDS interventions even
after completion of the project. As a Natural Facilitating Agency, Drug Manufacturers Association
(DMA) Uttarakhand could establish BDS Help Desk for continuation of BDS activities (Quality,
Energy, ICT, LEAN and Financial Linkage). Dolphin group of Educational Institutions will continue the
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Industry Institutional Linkage. The SPV (Shivalik Research & Analytical Services) in association with
DMA will provide the practical oriented trainings and analytical Laboratory services.
The interventions implemented by APITCO as per the approved Action Plans in the Dehradun Cluster
have shown visible results in the areas of quality, ICT, Energy savings, exports etc. For instance,
Quality compliance in 88 SMEs has been increased and it resulted in these firms getting additional 15%
of the business from the Contract firms. The Cluster turnover has increased by 12% per annum. Around
720 existing technical and non-technical staff were trained in GMP, GLP through theoretical and
practical oriented trainings. These interventions resulted in reduction of internal rejections by 50%,
external rejections by 40% and rework & reprocess by 60%. In the area of ICT, well developed ERP
solutions along with Business intelligence tools were introduced in 10 SMEs which has resulted in
increased efficiency and productivity by 25%. The interventions in the area of Energy have resulted in
savings of Rs.1.2 crores in Pharma Industry. Out of 40 BDSPs introduced, 25 BDSPs have generated
new business in the industry without project support.
Pharma institutions were linked with the Pharma industry and MoUs signed with the BMOs, to fulfill
the needs of the industry as well as enhance employability of fresh graduates. 20 small units entered into
the international market (Both regulatory & non-regulated countries). The exports of 22 Medium units
have increased by 5%. Infrastructure development has been initiated by forming 2 SPVs and prepared
Detailed Project Report for establishing Common Facility Centre for M/s. Shivalik Research and
Analytical Services (P) Ltd., Dehradun formed by Drug Manufacturers Association Dehradun, and
submitted to Director of Industries, Uttarakhand a copy of DPR is submitted to SIDBI for wetting.
Presently the file is pending with SIDCUL for allotment of land though it has given oral consent to allot
land in Pharma City, SIDCUL, Selaqui, Dehradun.
The government of Uttarakhand has laid huge emphasis on business facilitation by creating an enabling
environment for industries to set up and start their operations in the state. The state government houses a
dedicated ‘investment promotion& facilitation center (IPFC)’ which acts as a centralized one – stop –
shop for the investors/ businesses and provides complete handholding support in a structured, focused
and comprehensive manner. If c will focus on investment promotion, facilitation, direct engagement and
consultation with investors/ Stakeholders and ensures investment realization and sustainable
industrialization in the state.
‘Uttarakhand right to service act, 2011’ & ‘the Uttarakhand enterprises single window facilitation and
clearance act, 2012’ were enacted to provide necessary timebound licenses, permissions and approvals
for the setting up of commercial establishments in the state. The state has ensured robust legal resolution
mechanisms to ensure time bound delivery of government services with more than 100 investor related
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services already notified under both the acts separately and is in the process of adding more such
services of multiple sectors shortly.
Addressing the following concerns of the Pharma sector could boost competitiveness, ease of doing
business and push Pharma exports from state:
▪ Power: The availability and quality of power is extremely important for pharma sector as they
are required to maintain temperature and humidity during all stages of production cycle. They
are also required to maintain the air quality during production process. Moreover, the machines
are PLC based and any interruption damage the machine, programming & effect production
cycle. The State has poor and erratic power quality with long power cuts forcing the trade to use
alternate modes. In the absence of quality of power, most of the units have placed Genset/UPS
which increase their production cost and companies using Genset creates pollution too. The trade
feels that good quality of power is the biggest issue and may be resolved.
Moreover, in the interest of eco-friendly environment of the state in the long run, State
Government may give incentives to industries to set up Solar Panels as initial cost is too high for
e.g. E.g.it was informed that the cost for placing solar panels for an area of 25000 sq ft would
cost to be Rs 50 lacs with return of investment in 5 years. In such scenario, State may sponsor
solar panels and should pay the initial cost. For a defined period, industry should pay fixed
amount of cost of electricity to the state and after state recovers the cost, then the ownership of
the material should move to industry without any charge for electricity use.
▪ Pollution Compliance: The formulation industry is far more less polluting sector compared to
APIs. However, certain degrees of checks and balances are important that need to be maintained.
The Selaqui region does not have common treatment plant for the waste generated by the units
and all the units are maintaining hazardous waste tank inside their units, which is taken by the
appointed agencies by the Government for further treatment. It was reported that although the
government has nominated 12 such agencies to carry waste but the trade is unaware as they are
exposed to only one agency which means the situation in monopolistic in nature and add to their
transaction cost. Multiple vendors should be listed and their prices should be approved by PCB
and listed on PCB State website and central Govt Pollution Board website. Moreover, units are
also required to pay Rs 5000 for the movement of hazardous waste. It was also suggested that to
maintain the export competitiveness of the state vis-à-vis with other states as well as competing
countries, such transaction may be subsidized for exporting units. The Industry also feels that
they may be allowed to transport hazardous waste to the nominated places on their own which
would help them to save cost.
The Industry also feels that the cost burden for them for waste transport is high. They are also
required to pay an annual fee for NOC to pollution board of Rs 60,000/- per year to the State
Pollution Agency which is extremely high considered to Drug Manufacturing License which is
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Rs 15,000/ for 5 years and also the nature of units being MSME. These charges should be in line
with what other States are charging like Himachal Pradesh and.
▪ State Drug Authorities to shift to Online Mode: To save transaction time and to enhance ease
of doing business, the State Drug Licensing Authority may completely shift their processes
online, which is currently in physical form and units are required to send their officials for this
purpose to Dehradun which is time consuming. Once the units have submitted all documents as
per the check list, processing/approvals may be accorded in time bound banner. It may be
mentioned that States like Gujarat and Maharashtra have moved to online mode
▪ Limited role of Central Drug Authorities: Earlier, for obtaining loan license, units were only
required to approach State Authorities. But, presently, they have to approach authorities both at
Centre as well as State which leads to duplication of exercise as well as inspection is done by
both. For Loan license, the State Drug Authority should have a final say and no inspection
should be done by authorities at central level as was the case earlier (the loan license is taken by
the companies who intend to use the manufacturing capacities of other companies in fulfilling
their requirements without mentioning their names in the final product. E.g: Cipla has loan
license companies in the State).
Another related issue is inspection at multiple times in case of addition in client/product. Once a
company is already accorded a license, they are again inspected by State/Central authorities in
case another company wish to get manufactured from them the same drug. The industry feels
that this provision may be examined to make it smoother and the role /relevance of central
authorities in such cases may be reviewed as it may not be required as the officers at State level
may be equally competitive.
▪ Integrated Warehouse: Due to medium sized nature of units where production, packaging as
well as warehousing is done, the industry feels that there should be a common warehouse facility
which they can use as extended storage & delivery point.
Further, to optimize available resources present in Industrial estate, the industry also suggested
that units which are working below their capacities / units having additional space, may be
allowed to lease out such space to other units for warehousing purpose. This will help the units
to free their spaces in their units and cane use it for production. The Government may like to
devise suitable mechanism for this which should be convenient to trade.
Couple of transporters may be nominated for such warehouses to offer the services at fixed rates.
▪ Skilled Manpower: In spite of roast of educational institutes in Dehradun offering B Pharma

degrees, the industry reported that the level of skill locally available is not competent to be
inducted in their units. They need to invest lot of time to make them aware about basic
understanding prior to assigning jobs. Moreover, once the skill is developed, they move to other
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units in pursuit of career. It is proposed that the Pharma units has lot of old machines which have
become redundant and the Government may consider to set up a modal pharma unit for the
upcoming students of nearby colleges. It was also suggested that the course modules of Institutes
may be reviewed and State Drug Authorities may also access the curriculum, faculty and quality
of students passing out from such colleges. Industry is willing to support academia in improving
the quality of education. Model Pharma unit on the similar lines is available in Baddi. Besides
Skilled manpower, the Pharma units also need lot of manpower at the packaging state which is
easily available.
▪ Testing Facility: Most of the pharma units there have in-house testing labs but in view of the
variety of test needed, arranging all instruments in house becomes unviable for units.
Stakeholders pointed that there is testing labs in and around industrial area and samples are sent
to other States/cities leading to extra time and delays. A Testing lab in Dehradun or Haridwar
would help the trade and could be even set up through a SPV
▪ Dedicated Cell for Promoting API Industry: API’s are the primary ingredient for Pharma units.
Most of the API’s are either imported from China and Uttarakhand based units purchase them
from importer distributor in India. Some are procured domestically from units in Maharashtra
and Gujarat as the raw material is available there. With China putting attention on their
environment, most of the API industry in China is affected of have been shut down due to which
the prices of API imports have increased substantially. Stakeholders feel that promoting API
industry in Uttarakhand will benefit the overall pharma sector in the State. Some segment of
industry was willing to invest in APIs industry but was apprehensive that the cost of raw
material for a similar unit shall be much cheaper compared to a similar unit in Uttarakhand due
to transportation cost. Stakeholders feel that Govt should earmark a space of 100 acres to
develop API on the lines being developed by Himachal Pradesh. A focused discussion with
industry may be done at Government level with stakeholder to examine the possibility of
benefits that can be given to API promotion in State while considering the environmental
concerns.
▪ Limitations in Expansion: The industry has informed that the provisions for expanding their
units, in case they wish to do so, by taking more land is difficult. Some of the units are empty
and still their requests to take over such spaces are pending for years.
▪ Promoting Indian Pharmacopia: A lot of countries including African countries insist on US

Pharmacopia or British Pharmacopia in spite of Indian pharmacopeia equally good due to which
companies inspite of having data and material are not able to secure business as they have to do
the exercise as per other standards. There is a need for recognition of that Indian Pharmacopia
for acceptability in African countries which would enable companies to sell the same drugs in
domestic as well export market. Testings are done as per these standards. It will save double
inventory as well as double testing.
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▪ Freight Disadvantage: The state being land locked have cost disadvantage over suppliers in
other States as they have to incur more cost in moving raw material to their premised. For e.g
making Ibuprofen painkiller, there is a need of 17 ingredients and one kg of each will result in
making 1 kg of finished goods. For a unit around Mumbai, the cost of moving raw material to
their premises would be much economical compared to Uttarakhand. Movement of goods from
Dehradun, Haridwar and Roorkee region to Delhi ICD TKD is costly and to remain competitive
trade feels that Transport subsidy may be provided based on Bill of Lading copy by the exporter
Trade has reported several issues with regard to even availability of transport leaving aside the
rates due to lack of transporters and vehicle availability. Pharma units in Selaqui are not calling
the empty containers and using e-sealing facility and have to rely solely on transport. It is
understood that companies with influence are able to manage close body trucks easily otherwise
it takes 2-3 days to make such arrangement It was also reported that collusion and extortion by
transporters is rampant. Presently most of them are sending their goods to ICD-Dadri and few
are sending to ICD-TKD. Alternatively, it is suggested that State should tender for transport
vehicles and fix prices. A centralized portal can also be developed wherein exporters can request
and book trucks for direct supply and prices governed by State. This will give enhance ease of
doing business.
▪ DGFT server: DGFT website is slow, poorly maintained and hardly works which creates
difficulty for the exporters in the region. The site should be revamped and should be made
compatible on all browsers and not only internet explorer. The state may like to take up this
issue with Central Govt.
The Pharmaceutical cluster of Dehradun is mainly engaged in the production of allopathic and
Ayurvedic formulations in various dosage forms; which includes tablets, capsules and liquid orals.
A few firms are involved in production of ointments and injectable.
The Pharmaceutical units in cluster can be classified into two categories;
1. Allopathic Formulations
2. Ayurvedic Formulations
There are approximately 45-50 pharmaceutical units in the cluster involved in manufacturing products
mentioned in the following tables.
Table 2. Products in Allopathic and Ayurvedic Category

S.No Products Category
.
(i) Tablets
(ii) Capsules
(iii) Liquids In Allopathic and Ayurvedic Formulations
Table 3: Products in Allopathic Formulations

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S.No Products Category
.
(i) I. V. Fluids
(ii) Eye drops
(iii) Ointments In Allopathic Formulations
It has been almost two decades since the initiatives were undertaken to set up pharmaceutical industry in
the region. Over a period of time, units have been established and have progressed to manufacture their
own products and a few are also part of contract manufacturing. Some units manufacture their own
products and some also manufacture for other firms. A few products have been depicted below (pictures
were clicked by mobile during the industry visit to these units) in the above mentioned categories.
Picture 1 & 2: Products (Tablets and Capsules) and Store house for raw material
Source: Windlass Biotech Ltd., Mohabewala Industrial Area.

As mentioned on the previous page, pictures below depict the packaging material for the medicines
being manufactured for large companies. Similarly, there are a few firms which manufacture the tablets
and other formulations for the large companies.
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Picture: 3 & 4: Flavor for Syrups & Packaging material
Source: Raw material in the Storehouse at Windlass Biotech Ltd.
A few more products in the similar categories mentioned above are depicted below in the pictures.
Picture 5: Tablets Picture 6: Syrups
Source: Cooper Pharmaceuticals Products (Tablets and Syrup), Selaqui
Value of the Cluster
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The cluster having appx. Investment of Rs. 120012 crores produces the output of the value of 3800
crores out of which 760 crores is exported13. It has gradually progressed well and in last decade and a
half and today have significant contribution to Indian pharmaceutical exports. Given the nature of
product, two decades during which cluster has progressed, we can say that it quiet organized. The fact
that out of 55 firms, 4814 have obtained WHO-GMP certifications further justifies the same. All these
firms are member of Drug Manufacturers Association (DMA), Dehradun. The cluster has public as well
as a few medical colleges, hospitals where medicines are provided as per government norms (to
government hospitals).
Profile/Status of the Cluster
Table 4: Profile of cluster

Cluster Location Dehradun
Products 55
Nature/Type of firms Formulations
Total number of SMEs 55
No of firms obtained GMP/WHO 35/48
certifications in the cluster
No of industrial estates occupied by 4 (UPSIDC, Pharmacity, Mohabewala Estate,
Pharmaceutical Cluster (units) Sara Industrial Estate)
No. of associations in the Pharma cluster 1 (Drug Manufacturing Association)
No of small enterprises ~15
No of medium enterprises ~30
No of large enterprises ~10
Average Investment in plant and machinery ~1200 crores
Annual turnover of cluster ~3800 crores
Annual export from cluster ~760 crores
Total employment in SMEs ~12,000 -150,000
Presence of BDSPs providers 12
Utilization of BDSPs by SMEs Medium to High
12
http://dcmsme.gov.in/dips/DIPSR%20-%20DEHRADUN.pdf (Aug 27 2020)
13
https://investuttarakhand.com/themes/backend/uploads/IP-UK%20Pharma%20Sector%20Profile% 202018 _09 _05.pdf
(Aug 23, 2020). The report states values pharmaceutical sector at USD 195 bn and predicts to reach at USD 284 bn by 2022.
On the basis of average, we have considered figure of USD 240 bn on the conservative side. Then calculated these two
tentative figures; where total output of Dehradun is 16 per cent of all India figure and further 20 per cent of Dehradun
figure is export figure
14
http://ukhfws.org/drugscontrol/pdf/info/List_of_WHO_certified_company.pdf (Aug 25, 2020)
P a g e 34 | 58
Production/Manufacturing Process
Tablets
Tablet manufacturing, starting from raw material procurement to dispatch for marketing involves
10 stages. As per regulatory requirements, all the incoming raw materials are to be tested to set
standards as per prescribed procedures. The approved materials are charged into a mixing
machine for dry mixing. Binding agents are added to the dry mixed raw materials to make
dough.
The dry mixed raw materials binding agents are added to make dough. The dough is spread on
trays for drying. Dried material is milled to obtain granules. To those granules, preservatives,
lubricants are added and mixed. These final granules are charged to compression machine to
produce tablets. These tablets are tested before proceeding for final packaging. Packed product
finally dispatched for marketing. A sample of each batch is retained as” retained sample” for any
future cross reference.
Capsules
Capsule’s manufacturing, starting from raw material procurement to dispatch for marketing
involves 11 stages. As per the regulatory requirements, all the incoming raw materials are to be
tested to set standards and as per prescribed procedures. The approved materials are charged into
a mixing machine for dry mixing. To the dry mixed material binding agents are added to make
dough. The dough is spread on trays for drying. Dried material is milled to obtain granules. To
these granules, preservatives, lubricants are added and mixed.
These final granules are filled in the empty gelatin capsules, capsuling are done in an automatic /
semiautomatic process. After filling, the same are subject to polishing to remove adhered
materials and give a glow. These capsules are tested before proceeding for final packing. These
finally packed products will be dispatched for marketing. A sample of each batch is retained as”
retained sample” for any future cross reference.
Process in the manufacturing of liquid orals.
Liquid syrup manufacturing, starting from raw material procurement to dispatch for marketing,
involves 9 stages. As per the regulatory requirements, all the incoming raw materials are to be
tested to set standards and as per prescribed procedures. In a tank, prepared sugar syrup / take
sweetening agent such as liquid glucose, sorbital, etc., to sugar syrup/ sweetening agent, add
the approved materials and mix. After completion of mixing, fill into a washed & dried bottle,
sealed the cap, affix the label and proceed for final packing. Finally, approved product will be
dispatched for marketing. (A sample of each batch is retained as ‘retained samples” for any
future cross reference).
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Capsules
Flow Chart of Manufacturing process for Capsules
Raw Material Polishing Packaging
Finished goods
Mixing Filling
warehouse
Wet
Blending Market
Granulation
Drying
Drying
Granulation
Picture 7: Manufacturing process for capsules

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Tablets
Flow chart of Manufacturing process for Tablets
Finished goods
Raw Material Packaging
warehouse
Dry Mixing Compression Market
Granulation Blending
Drying Milling
Picture 8: Manufacturing process for Tablets
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Liquid Orals
Flow Chart of Manufacturing process for Liquid orals
Filling and Labelling and

Raw Material
Sealing packaging
Finished goods
Mixing Bottle Washing
warehouse
Filtration Holding Tank Market
Picture 9: Manufacturing process for Liquid Orals
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Value Chain Process
Value Chain analysis of a Tablet by a non-cGMP and GMP following Unit as on

2014 is as follows:
Rs. 110 for procured from local market

Raw Material Rs. 95 procured from approved vendor
Rs. 7 while not following prescribed methods

Quallity testing Rs. 10 while following prescribed test methods

Mixing Rs. 8 while following prescribed test methods

Drying Rs. 7 while following prescribed test methods

Milling Rs. 9 while following prescribed test methods

Compression Rs. 7 while following prescribed test methods

Quality Testing Rs. 10 while following prescribed test methods

Packing Rs. 25 while following prescribed test methods

Final Testing Rs. 12 while following prescribed test methods

Marketing Rs. 60 while following prescribed test methods

Profit Rs. 60 while following prescribed test methods
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MRP Rs. 303 while following prescribed test methods
4.5 Cluster stakeholders and their linkages
“Clusters are geographically concentrations of interconnected companies,

specialized suppliers, service providers, firms in related industries and associated
institutions in particular fields that compete but also cooperate. The main
stakeholder groups for knowledge-intensive clusters typically include large
companies and SMEs, universities and research centers, national and regional
policy makers, other regulators (e.g., European Commission), Technology
Transfer Offices, incubators and other supporting structures, general public of the
region. Consequently, cluster managers are required to present accurate,
meaningful and actionable information to a highly diversified audience. It is
therefore important to acknowledge the difference between various stakeholder
groups and tailor communication to the needs of particular group(s). It is essential
that a platform for effective communication is adopted by all key stakeholders of
the cluster. This platform would form the basis for all communication within the
cluster and would be the agreed basis for information sharing and dissemination.
Failure to communicate effectively leads to delays in collaborative action, reduces
the quality of shared information and thus hinders the development of the cluster.
Cluster governance should not be equalled to cluster management. While cluster
management is about the actual management of the cluster, cluster governance is
about ensuring that the cluster is well managed. Cluster governance represents the
interests of cluster stakeholders (e.g., universities and research institutes, large
and small companies, government, supporting structures etc.), while cluster
managers strive to serve the needs of cluster stakeholders. Cluster management
addresses day-to-day cluster activities such as planning, allocation of human and
financial resources, monitoring cluster progress etc. Governance, in turn, among
others refers to appointing cluster managers and evaluating their performance,
setting the vision and strategy of the cluster and approving action plans.
Firms strategically cluster in order to generate beneficial externalities connected

to increased productivity and innovation. Clusters generate the following
externalities:
Sharing intermediate inputs- One firm produces something that another firm use
as an input in its daily operations. Clusters constitute of many firms sharing
intermediate inputs, which enables benefits such as “production of scale”
(O’Sullivan 2011). Increased pressure is put on the suppliers forcing them to
optimize their production, leading to decreased costs for their products/services.
Additionally, suppliers are able to distribute fix costs on a larger amount of
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costumers, which once again decreasing the costs for their products/services
(Porter 2008).
Access to specialized inputs- Small innovative firms will benefit from proximity
to customers in terms of an unstable market. Costumers on the other hand can
affect suppliers more effectively, by matching specialized technology with
specific products/services. Through this close collaboration both suppliers and
customers will benefit and increase their productivity (O’Sullivan 2011).
Sometimes external outsourcing is required, when local competitive suppliers is
unavailable. This is not the ideal arrangement, considering increased transaction-
and administrative costs (Porter 2008).
Access to specialized labour- Decreased costs for production will enable firms to
offer competitive wages and learning opportunities. These aspects will increase
the attractiveness of the cluster, drawing specialized and knowledgeable personnel
(Porter 2008; O’Sullivan 2011). The high concentration of specialized labour, also
called “labour pool”, will enable firms to match people with specific projects. It
will also enable specialised labour to allocate job opportunities, due to a large
concentration of innovative activities (O’Sullivan 2011).
Access to information- Knowledgeable firms and labour will increase the access
to valuable information. Clusters have a competitive advantage on both the local-
and global market, triggered by innovation. Cutting edge technology is distributed
through either collaborations or social relations, often referred as “knowledge
spillover”. The entire productivity of a cluster will increase due to knowledge
spillovers, resulting in a very competitive region (Porter 2008; O’Sullivan 2011).
Complementarities- Clusters facilitate complementarities between activities and

participants. Productivity and performance is jointly judged for all of the firms
included in the cluster, making them dependent on each other. Increased pressure
is put on their performance, which will result in improved quality and efficiency
of their activities. Marketing is also more efficient within a cluster, since adds and
magazines includes many firms operations (through interconnections).
Access to institutional and public goods- Clusters could influence public

investments such as, specialized infrastructure, education programs, information,
trade fairs and other forums that benefits from cluster activities and increase the
visibility of its participants (Porter 2008).
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Incentives and performance measurement- Firms are more willing to measure
their performance and improve their productivity due to increased competition
(Porter 2008). They are able to compare themselves with cutting edge
competition, leading to a more complexed knowledge of their market
performance.
Clusters are particularly promising environments for SME development. Due to

their small size, SMEs individually are often unable to realize economies of scale
and thus find it difficult to take advantage of market opportunities that require the
delivery of large stocks of standardized products or compliance with international
standards. They also tend to have limited bargaining power in inputs purchase, do
not command the resources required to buy specialized support services, and have
little influence in the definition of support policies and services. The existence of
a cluster per se does not automatically ensure that entrepreneurship will flourish
or that enterprises will generate sustained returns. Even when located within a
cluster, small and medium-sized enterprises (SMEs) face barriers to growth.
Although these barriers are often considered to relate to the size of the enterprises,
on closer examination they are frequently revealed as having more to do with
isolation.
In non-performing clusters, these constraints often manifest in unhealthy

competition based on lowering wages, disregarding the welfare of workers,
minimizing investment in technology and depleting natural resources. This form
of competition results in stagnant clusters, with local stakeholders reaping few
benefits. Evidence from strongly performing clusters, by contrast, demonstrates
that it is possible for SMEs to achieve high levels of growth by achieving steady
quality improvements and adding value, while at the same time respecting
environmental, social and labour standards. Spatial proximity and shared strategic
interests allow enterprises and their support institutions to realize shared gains
through the organization of joint actions between cluster enterprises (e.g., joint
bulk inputs purchase or joint advertising, or shared use of equipment) and
between enterprises and their support institutions (e.g., provision of technical
assistance by business associations or investments in infrastructure by the public
sector). The advantage accruing to the cluster from such collective efforts is
referred to as collective efficiency.
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Concentration of units in a given geographical location producing same or similar
types of products and facing common opportunities and threats is called a cluster.
Clustering has been the age-old phenomenon in India. Clusters have been in
existence in India for centuries and are known for their products at the national
and international level. India has more than 6400 clusters. These have been
typified as industrial, handloom, and handicraft clusters. Clusters represent the
socio-economic heritage of the country where some of the towns or contiguous
group of villages known for a specific product or a range of complementary
products that have been in existence for decades and centuries. In a typical
cluster, producers often belong to a traditional community, producing the long-
established products for generations. Indeed, many artisan clusters are centuries
old. Given below are examples of such clusters.
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4.6 Impact of covid 19 on Global Pharmaceutical sector
Originating from China, the novel corona virus (COVID-19) drastically spread
throughout the world in quick span of time and affected almost all countries
across the globe. In the last 8 months, COVID-19 has been spread rapidly and
infected about 17 million world populations out of which more than 6.5 lacs
people died. In Indian scenario, the rate of infection increased abundantly in the
last few days which make India the 3rd most affected countries in World. Subjects
suffering from infectious and non-infectious diseases of the lungs are found to be
more risk from this viral infection due to the lower immune system. Hence,
enhancing the immunity (natural body system) may possess the major
contribution as a prophylactic measure against multiple pathogenic conditions as
well as maintaining optimum health. In recent study in Spain, results showed that
only a small population of people have secondary antibodies due to COVID-19
infection which indicates that the immunity developed after COVID-19 infection
will not persist for a long time. Hence, there is a high need of development of
pharmaceutical sectors including synthetic drug industries, herbal industries and
pharmaceutical biotechnology in India.
Covid-19 could affect the supply of finished drugs as well as Active

pharmaceutical ingredients (APIs) to the world. China & India are major suppliers
of Finished dosage products as well as API to the World. Factory lockdowns in
China and logistics delays due to Covid-19 measures at ports may affect
production and delays in shipping of APIs. With the coronavirus spreading
Globally, the Pharmaceutical industry will have serious impact on costing. API
imports from Indian manufacturers have been a major cost advantage for global
pharmaceutical companies, but the outbreak in China and Covid-19 spread to the
EU could limit the supplies to the global manufactures thereby increasing the
overall costs to global manufacturers and importers & there by impacting
consumers.
At operational level, obviously there is impact by way slowing down the

operations due to delays in activities, social distancing, continuously wearing face
masks, sanitization, minimum workforce etc. All this results in lowering
productivity.
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However due to pandemic situation, Pharmaceutical products are in great demand
& Pharmaceutical Industry is seeing silver lining in growing demand & business.
COVID-19 may be seen as a century’s opportunity for pharmaceutical industry;

as it increases the demand for prescription medicines, vaccines and medical
devices. This can be seen as one of the main short-term effect of COVID-19
epidemic; however, there are more short and long-term implications to it; which
will be discussed below:
Short-term impacts
Demand change, supply shortages, panic buying and stocking, regulation changes
and shift of communication and promotions to remote interactions through
technology and research and development (R&D) process changes can be seen as
short-term impacts of COVID-19 on the health market.
1. Demand change, which leads to shortage, in the case of induced demand and
panic-buying of oral home-medications especially for chronic disease may be due
to the pandemic (COVID-19-related), and also shortages due to supply-chain
inconsistencies.
COVID-19-related: Increased hospitalization, incidence of COVID-19-related

pneumonia and increased demand for assigning patients to ventilators, contributes
to related prescription medicine shortages. A medicine shortage is defined as a
“supply issue that affects how the pharmacy prepares or dispenses a drug product
or influences patient care when prescribers must use an alternative agent” [9]. On
the global levels, many regulatory authorities announced confirmed shortage list,
mostly including potential COVID-19 treatments and also associated pneumonia.
For example, United States food and drug administration (FDA) shortage list
included anti-COVID-19 potential pharmacotherapies, hydroxychloroquine
(HQC) and chloroquine (QC), and also frequently prescribed medications for
COVID-19 hospitalized patients with respiratory signs in critical care units,
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azithromycin, dopamine, dobutamine, fentanyl, heparin, midazolam, propofol and
dexmedetomidine. In addition, the American Society of Health-System
Pharmacists (ASHP) announced an 11-medicine list of shortage; which mainly
included hospital level antibiotics and anesthetic medications; including
meropenem, ceftazidim, ampicillin and doxycycline, as antibiotics and
vecuronium, rocuronium, as anesthetics. Also, this list included albuterol and
fluticasone which are used to open airways in the lungs.
In global levels, the impact on medicine shortage was differed by medicine access
level, retail and hospital-only, and type. Use of medicines currently being
investigated in trials but not yet fully approved by FDA or so-called
investigational treatments—including hydroxychloroquine, lopinavir+ritonavir,
tocilizumab and sarilumab—had seen a two-fold increase in use over the past
month, with 8 times higher use in hospitals. Medicines used in hospitals for
COVID-19—including respiratory treatments, sedatives and pain treatments—had
experienced an increase of 100% to 700%, since the beginning of January.
In local levels, Iran food and drug administration (IFDA) sale’s data indicates that
HQ, QC and lopinavir+ritonavir experiences 2, 6 and 23 times increase in their
monthly sale volume, respectively; however, IFDA’s list of medicine shortage for
emergency-supply did not report any shortage of aforementioned medicines
and/or the drugs required by pneumonia-related hospitalized COVID-19 patients.
One of the explanations for this may be the high stock of raw materials; which is
justified by the market uncertainties due to Iran’s economic and political factors,
which leads companies to over-stock. The other reason was currency allocation to
importation of COVID-19 required medications, by the government. For example,
lopinavir+ritonavir accounted for 0.18% (2 of 1101 billion US Dollars) of six-
month approved currency order by IFDA to Iran central bank, for raw materials,
finished pharmaceuticals and dietary formula.
This COVID-19 related shortage also affected the health market for medical
devices and personal protective equipment (PPE), which includes protective
goggles and visors, mouth-nose protection equipment, and protective clothing and
gloves, that made countries to legislate regulations in this regards. The market
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entry facilitation and export restrictions of PPE and selected medical devices
European Commission (2020/403 of 13 March 2020) is one example, in global
levels. In Iran on March 1st 2020, national medical device directorate of Iran
announced that restrictions on PPE export is legislated by Iran custom office.
Also, in order to expedite the supply of required goods and also to reduce the
number of face-to-face visits, the process of issuing emergency licenses for
medical equipment supplies has been accelerated by sending them to the online
communication system and receiving initial approval within one business day.
Customs measures to combat this pandemic included banning the export of
masks, medical gown, gloves, disinfectants, soap, detergents and alcohol, and also
expediting the issuance of clearance permits for imported items related to
coronavirus and exemptions from costume tariffs.
Induced demand and panic buying: Induced demand for stocking medication by
public, which is called “panic buying”, may cause periodic shortage in the market;
especially for chronic disease medications. Studies reported that induced demand
in global pharmaceutical market, mainly due to “panic buying” of
pharmaceuticals for chronic disorders, was estimated to be +8.9%, by March
2020. An study in USA indicated that from 13th to the 21st of March 2020,
asthma medications spiked by 65%, and type 2 diabetes medications increased by
25%. Similarly, medicines treating high cholesterol, migraine, and
hypothyroidism also saw a noteworthy increase in claims. Also, in USA, Excess
buying for hypertension, Diabetes, respiratory, and mental health and anxiety was
0.6%, 0.3%, 0.4%, 0.4% and 0.1% respectively. In Australia, a one-month-stock
regulation for dispensing of prescription medicines, is somehow handling the
situation of panic-buying. In Germany, German Federal Institute for Drugs and
Medical Devices (BfArM) published an allocation order on the storage and
demand-driven supply of human medicines, on March 2020. The allocation order
requested the pharmaceutical companies and wholesalers not to supply medicines
beyond the usual demand. In contrast, the “stay at home” order in some countries
may have caused a decrease in demand; however, in Iran, due to lack of such
regulation only induced demand was reported informally by retail pharmacies.
Supply shortage of both active pharmaceutical ingredients (APIs) and finished

products: China and India are the world’s main supplies of APIs, key starting
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materials (KSMs) and also finished pharmaceuticals. As they are struggling with
the disease and also a slow-down in production, this may have contributed to
shortage and also price increase in essential prescription medicines, including
antibiotics. This is more critical when non-substitutional essential APIs, such as
amoxicillin, potassium clavulanate, ceftriaxone potassium sterile, meropenam,
vancomycin, gentamycin and ciprofloxacin are being concerned. In India, the
Indian Pharmaceutical Alliance (IPA) asked government to restrict of all
pharmaceutical products, APIs and formulation to domestic consumption only.
This shortage has already begun to affect API and bulk prices in Indian party
trades. The average increase was reported to be about 10–15%; however, may
reach to 50% in some cases.
In global levels, to avoid shortages, FDA and European Commission proposed

and published regulations focusing on both demand optimization and rational
supply. These regulation revisions include:
Fast-track approvals for COVID-19-related treatments; In Iran, this is in terms of

Iran medicine list (IML) inclusion and registration process.
Compulsory licensing for potential COVID-19 treatments; however, this is in the

context of countries who are World Trade Organization (WTO) members and are
following intellectual property laws; and it is not subjected to Iran.
More regulations to enhance importation, in order to maintain integration of

supply chain; however, regarding the economic crisis and currency shortage in
Iran and also Iran’s NDP component on enhancing local production and
importation minimization, this regulation is not subjected to current context.
In Iran, again due to over-stocking based on economic and political uncertainties,

this impact has not yet to be sensed completely; however, as about 5% of sale
volume and 30% of sale-value of finished pharmaceuticals and about 50% of the
P a g e 48 | 58
API are being imported into the country, this shortage type will impact the local
pharmaceutical industry.
2. Shift of communication and promotions to remote interactions through tele-

communication and tele-health: In both global and local levels, due to the social
distancing precautions, marketing and promotions of health-care products to
providers are being shifted from face-to-face towards remote interactions and tele-
communications; for both promotional and patient-support acts. In USA, the
number of patients who have visited physician offices or clinics reduced by 70 to
80%.
In Iran insurance coverage for tele-medicine is legislated for the first time by high
council of insurance on May 2020. This may lead to long-term behavioral
changes in the health market.
3. Research and development changes
In global levels, at least 113 medicines or regimens and 53 vaccines are in

research and development pipelines or active clinical trials, as therapeutics for
patients diagnosed with COVID-19. As of April 23, 2020, there are about 924
ongoing trials in the world for the treatment of COVID-19. Only 15% of these
studies are based on conventional RCT methods, double-blind and multi-center
randomized with comparator arm, but about 40% are not even randomized.
In Iran, HCQ is available through local production with five active suppliers and a
price of 0.1 US$ and is being investigated in 64 MOH-registered clinical trials on
COVID-19 patients. CQ, which is also available by one local manufacturer with
the price of 0.03 US$, is the intervention arm in 29 Iran MOH trials and
lopinavir/ritonavir, which is included in Iran local COVID-19 management
guideline for high-risk patients as an additive to CQ or HCQ regimen and is
available through generics importation from Indian suppliers with a registered
price of 0.82 US$ per unit, is being investigated in 20 Iran MOH trials on patients
with confirmed COVID-19. In addition, multiple clinical trials are being
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conducted to test non-IML-included medications; naming favipiravir and
remdesevir. Favipiravir is currently being tested through three MOH-supervised
clinical trials in Iran and three local manufacturers are conducting
pharmacokinetic and stability analysis on aforementioned pharmaceutical
strategy. Also, Remdesivir which is an antiviral in first steps of drug
development, is being under clinical investigation through Iran MOH-registered
clinical trials. This medication was obtained emergency authorization approval by
the FDA on May 1st, 2020 for hospitalized patients with severe disease condition.
Above being noted, there is a dilemma regarding pseudo-researches and industrial

investments on medicines which will be identified as non-effective in the near
future; which may eventually pose a considerable burden on the health system.
Ethical considerations must be taken into account within the excited decision
making about the use of the treatment strategies based on the results of these
pseudo-researches.
Long-term impacts
Approval delays, moving towards self-sufficiency in pharm-production supply

chain, industry growth slow-down and possible trend changes in consumption
could be seen as long-term impacts of COVID-19 on the health and
pharmaceutical market.
1. Delayed approvals for non-COVID-related pharmaceutical products; as all

countries, including Iran, are being under pressure of the crisis and their priority is
COVID-19 management, approval delays may be seen due to several month of
application review postponements. In Iran, due to economic crisis, IML inclusion,
registrations and reimbursement decisions was being made with a considerable
delay; and this situation may maximize it. It also is affected by about one-month
semi-closure of regulatory agencies.
2. Moving towards self-sufficiency in pharma industry; potential shortages due to

export bans in India and China, who are main suppliers of API and generics, made
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governments of many countries to consider self-sufficiency in supply chain and
they have announced regulations to avoid shortages in such crisis [27]. In this
regards, on March 2020 the European commission has published a new guideline
concerning foreign direct investment and free movement of capital from third
countries; stating that foreign investments, especially those which affect the
health market, in European Union (EU), must be subjected to risk-assessments to
avoid any harmful impact on the EU’s capacity to cover the health needs of its
citizens [28].
In Iran, due to sanctions and difficulties in importation, Iran’s pharmaceutical

industry was going towards self-sufficiency prior to this crisis; however, COVID-
19 pandemic may lead to more importation restrictions and further regulation
incentives for local manufacturing.
3. Pharmaceutical industry growth slow-down; Coronavirus pandemic resulted in

economical slow-downs for many countries and this will possibly lead to pharma
industry growth slow-down, which are sensitive to country economic growth;
especially, in countries with pharmerging markets, like Iran. This slowdown in
market growth is more due to the entry of newer medications. Because the
priorities of pharmaceutical companies change in their portfolio. However, it
should be noted that in previous recessions, there were cases in which the health
industry was less sensitive to slowing economic growth and did not always follow
this trend [29].
4. Ethical considerations: One of the long-term effects of growing clinical

research related to the current pandemic is the use of poorly evidence centered
therapies. Ethical issues should be considered in the use of these medicines as off-
label [26]. In confirming the proposed therapies, the long-term clinical effects of
the use of these strategies in the coming years should be examined and healthcare
providers should make informed decisions on using off-label therapies in clinical
practice.
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5. Consumption trend changes in health-related products: Changing habits related
to consumption and refilling prescriptions, especially in chronic disease
therapeutic areas, might happen; and may also be further affected by the emerging
tele-medicine.
Currently, public is concerned with personal hygiene maintenance; using mainly

nose/mouth protection, anti-infections material for environment and clothing and
hand sanitizers. Due to extended period of pandemic, this consumption may
remain in behavioral acts of the public, globally and locally.
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4.7 Impact of Covid 19 on Indian Pharmaceutical sector
The Indian pharma sector is the third-largest in the world. It manufactures almost
60 per cent of the vaccines used globally, including important ones, such as those
against diphtheria, tetanus, and pertussis required by the World Health
Organisation (WHO). Furthermore, the country meets 90 per cent of the global
demand for the vaccine against measles.
Millions across the world use generic drugs produced by Indian drug
manufacturers. More than 250 factories in the country have been approved by the
US Food and Drug Administration (FDA) as well as the UK Medicine and
Healthcare Products Regulatory Agency (MHRA). These manufacture drugs for
overseas markets, including the US and the UK.
India’s active pharmaceutical ingredient (API) industry is expected to generate $6

billion in revenues by the end of 2020.
Currently, generic drugs are playing a crucial role in the fight against COVID–19.
India has been meeting more than 20 per cent of the world and almost 50 per cent
of the US’s generic drug requirements. Unfortunately, Indian manufacturers rely
heavily on China for key starting materials (KSMs), intermediate and APIs with
China catering to nearly 70 per cent of Indian pharma companies’ requirements.
The Indian pharma sector is an important component of the global healthcare

infrastructure and is instrumental in saving millions of lives every year. However,
like all other sectors, it too has been affected by COVID–19 that has brought
about various changes.
The COVID–19 pandemic has disrupted supply chains across the world. Every
sector, including pharma, is suffering from supply chains coming to a grinding
halt. Prices of raw materials have shot up amid limited supply, production
schedules have been interrupted, factories have been shut down and shipping
costs are sky-high in most countries. The impact on the Indian pharma sector is
typically evident, given that most raw materials are procured from China, the
epicentre of the outbreak.
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With the movement of people and goods restricted amid lockdowns,
manufacturers of generic drugs are unable to launch products or conduct clinical
trials. As a result, timelines for drug filings have got stretched. Furthermore, cash
flows from new generic drug launches have either been wiped out or delayed.
Indian drug manufacturers face other challenges as well. An Indian

pharmaceutical facility can sell drugs in the US only after it has been inspected
and approved by the US FDA. With the ban on international travel, inspection is
naturally out of question, rendering it impossible for Indian drug companies to
sell in the US and other overseas markets. The pandemic has also forced generic
drug manufacturers, both contract and captive, to delay their plans for new
product launches.
When product launches and clinical trials by large global pharma companies are
delayed, the drug companies from which they source materials face the heat. Low
sales, therefore, pose another major concern for Indian drug manufacturers
supplying to international pharma giants.
Some Indian pharma facilities had to be shut as workers tested positive for
COVID–19. Plants that are operational are producing less due to manpower
crunch amid lockdown and social distancing measures. In short, production
timelines have changed drastically.
With China losing credibility on account of not disclosing information on the

virus or the severity of the outbreak on time and thereby contributing to its
development into a pandemic, government leaders and businesses are looking at
other alternative low-cost nations to source supplies. India could directly benefit
from this. The country has a robust pharma sector, with proven expertise in drug
manufacturing and treatment. This got further highlighted when the country
quickly ramped up production of Hydroxychloroquine, a key drug used in the
fight against the virus.
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Although India depends on China to meet its bulk drug requirement, steps taken
by the Indian government to incentivize the production of APIs and KSMs under
the ‘Make in India’ programme will help in reducing this dependence. The
promotion of bulk drug parks under this initiative would help India become self-
sufficient in drug manufacturing, from KSMs to generic formulations. The
COVID–19 pandemic is changing the world order and power structure,
compelling leaders across the globe to revisit their business and growth strategies.
With its deep expertise in the manufacture of drugs, highly skilled scientists, and
low-cost manufacturing, India definitely stands to gain from such a restructuring.
https://www.fortunebusinessinsights.com/impact-of-covid-19-on-pharmaceuticals-
market-102685
P a g e 55 | 58
Conclusion
So, here to conclude interrelations between the stakeholders of the cluster.
Clusters are particularly promising environments for SME development. Due to
their small size, SMEs individually are often unable to realize economies of scale
and thus find it difficult to take advantage of market opportunities that require the
delivery of large stocks of standardized products or compliance with international
standards.
But in Dehradun Cluster, all the firms are member of Drug Manufacturers
Association (DMA), Dehradun. The cluster has public as well as a few medical
colleges, hospitals where medicines are provided as per government norms (to
government hospitals).
The government of Uttarakhand has laid huge emphasis on business facilitation

by creating an enabling environment for industries to set up and start their
operations in the state. The state government houses a dedicated ‘investment
promotion& facilitation center (IPFC)’ which acts as a centralized one – stop –
shop for the investors/ businesses and provides complete handholding support in a
structured, focused and comprehensive manner. IPFC will focus on investment
promotion, facilitation, direct engagement and consultation with investors/
Stakeholders and ensures investment realization and sustainable industrialization
in the state.
P a g e 56 | 58
Bibliography
TOR - Cluster Intervention1. (2018). Retrieved from Cluster-Level Intervention
Programme (CLIP) in select MSME clusters:
https://www.sidbi.in/files/tenders/Terms-of-Reference.pdf
Alvaro, D., Challener, C. A., & Branch, E. (2020, March 20). M&A: Fundamental to
Pharma Industry Growth. Retrieved from Pharma's Almanac:
https://www.pharmasalmanac.com/articles/ma-fundamental-to-pharma-
industry-growth
Aranca. (2019, jaunary). Pharmaceuticals. IBEF.
Centre, N. I. (2017). Department of Pharmaceuticals. Retrieved from Pharma Industry

Promotion: https://pharmaceuticals.gov.in/pharma-industry-promotion
Deloitte. (2019). 2019 Global Life sciences outlook. Retrieved from Deloitte:
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-
Sciences-Health-Care/gx-lshc-ls-outlook-2019.pdf
European Medicines agency. (2020). Retrieved from

https://www.ema.europa.eu/en/medicines/field_ema_web_categories
%253Aname_field/Human/ema_group_types/ema_medicine/
field_ema_med_status/authorised36/ema_medicine_types/
field_ema_med_biosimilar/search_api_aggregation_ema_medicine_types/
field_ema_med_biosimi
(2018). EXPORT STRATEGY of Uttrakhand. FIEO.
Government. (2011). Industrial profile of Haridwar District.
Government. (2017). Scheme for Cluster Development Programme for Pharma sector.
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%20for%20Cluster%20Development%20Programme%20for%20Pharma
%20Sector.pdf
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Invest Uttarakhand. (2019, may 21). Retrieved from Pharmaceuticals sector profile:
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%20Sector%20Profile%202018_09_05.pdf
MIDAS, I. (2019, May). EPFIA. Retrieved from Pharmaceutical industries in figure:

https://www.efpia.eu/media/412931/the-pharmaceutical-industry-in-figures-
2019.pdf
Prasad, V. R. (2009). Workshop for business development services. APITCO, (p. 2).
Dehradun.
Pulse, C. (2014). SIDBI- GIZ study of non financial gaps in Dehradun Pharma Cluster.
Dehradun: SIDBI.
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PHARMACEUTICALS SECTOR DEHRADUN CITY. International Journal of Education
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P a g e 58 | 58

Dissertation - Divya Agarwal

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ANALYSING LINKAGES BETWEEN STAKEHOLDERS OF A

BBA Foreign Trade

MSME cluster in the belt of Haridwar-Dehradun-Roorkee involves various stakeholders. These

(Invest Uttarakhand, 2019)

(Government, Industrial profile of Haridwar District, 2011)

( TOR - Cluster Intervention1, 2018)

(EXPORT STRATEGY of Uttrakhand, 2018)

(Sinha & Shukla, 2013)

 To study the status of MSMEs in Pharmaceutical sector in Dehradun.

3.2 Scope of Research

3.3 Research Methodology

3.4 Sources of Data:

4.1 Pharmaceutical sector of world

India's biotechnology industry comprising biopharmaceuticals, bio-services, bio-agriculture, bio-

 Drug Manufacturers Association

BDS Area Key Issues

▪ Skilled Manpower: In spite of roast of educational institutes in Dehradun offering B Pharma

▪ Promoting Indian Pharmacopia: A lot of countries including African countries insist on US

Table 2. Products in Allopathic and Ayurvedic Category

Table 3: Products in Allopathic Formulations

Source: Windlass Biotech Ltd., Mohabewala Industrial Area.

Source: Raw material in the Storehouse at Windlass Biotech Ltd.

Picture 5: Tablets Picture 6: Syrups

Source: Cooper Pharmaceuticals Products (Tablets and Syrup), Selaqui

Value of the Cluster

Profile/Status of the Cluster

Table 4: Profile of cluster

Process in the manufacturing of liquid orals.

Raw Material Polishing Packaging

Picture 7: Manufacturing process for capsules

Dry Mixing Compression Market

Picture 8: Manufacturing process for Tablets

Filling and Labelling and

Filtration Holding Tank Market

Picture 9: Manufacturing process for Liquid Orals

Value Chain analysis of a Tablet by a non-cGMP and GMP following Unit as on

Rs. 110 for procured from local market

Rs. 7 while not following prescribed methods

Rs. 5 while not following prescribed methods

Rs. 5 while not following prescribed methods

Rs. 6 while not following prescribed methods

Rs. 5 while not following prescribed methods

Rs. 8 while not following prescribed methods

Rs. 15 while not following prescribed methods

Rs. 8 while not following prescribed methods

Rs. 45 while not following prescribed methods

Rs. 40 while not following prescribed methods

“Clusters are geographically concentrations of interconnected companies,

Firms strategically cluster in order to generate beneficial externalities connected

Complementarities- Clusters facilitate complementarities between activities and

Access to institutional and public goods- Clusters could influence public

Clusters are particularly promising environments for SME development. Due to

In non-performing clusters, these constraints often manifest in unhealthy

Covid-19 could affect the supply of finished drugs as well as Active

At operational level, obviously there is impact by way slowing down the

COVID-19 may be seen as a century’s opportunity for pharmaceutical industry;

COVID-19-related: Increased hospitalization, incidence of COVID-19-related

Supply shortage of both active pharmaceutical ingredients (APIs) and finished

In global levels, to avoid shortages, FDA and European Commission proposed

Fast-track approvals for COVID-19-related treatments; In Iran, this is in terms of

Compulsory licensing for potential COVID-19 treatments; however, this is in the

More regulations to enhance importation, in order to maintain integration of

In Iran, again due to over-stocking based on economic and political uncertainties,