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Diversified

Indian officials explain why country's pharma firms are expanding U.S. presence

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Manish Singhal, assistant secretary general of the Federation of Indian Chambers of Commerce and Industry.
Manish Singhal, assistant secretary general of the Federation of Indian Chambers of Commerce and Industry. - ()

What seems like contradictory politics for the life sciences industry, which is focused on global growth, is actually encouraging Indian interest.

On one side of the globe, Indian Prime Minister Narendra Modi has pushed the “Make in India” campaign to encourage more local production of goods.

On the other, U.S. President Donald Trump is pushing “Buy American, Hire American” to encourage local production and decrease the dependency on foreign countries like China, as well as decrease the use of H-1B visa workers.

But rather than be discouraged, Indian companies are actually ramping up their presence and efforts to locate or produce for the U.S. market.

The latest proof of that is Lupin Pharmaceuticals opening a manufacturing facility in Somerset.

Lupin joins Sun Pharmaceuticals and Dr. Reddy’s Laboratories as Indian pharma firms in the state.

Right now, roughly 30 percent of generics in the U.S. come from India, according to Sumani Dash, director and country head of the U.S. and Canada for the Confederation of Indian Industry.

Dash said the result is billions of dollars invested in state-of-the-art manufacturing in the state, as well as expansion of commercial space — a fact well-known by the local municipalities.

Which is why the companies that manufacture drugs in India are ramping up their presence at shows like Interphex.

Interphex is one of the largest and oldest conferences for pharmaceutical, biotechnology and medical device development and manufacturing, having been around for 38 years and attracting more than 600 companies each year for the three-day event in New York City.

The conference saw a growth after just two years of introducing a special section for Indian companies — the India Pavilion — and the group’s organizers are only planning to continue the upward trend.

Last year, the India Pavilion was about 6,000 square feet, with 34 vendors. This year, it went up by 600 square feet to include a total of 46 vendors, according to an Interphex spokesperson.

The enthusiasm today is a far cry from two years ago, when pharmaceuticals came under fire from the FDA after negative audit results and more stringent rules that some Indian companies felt were targeting them.

Since then, Dash said, the companies have worked with the FDA to improve, and asked for a level playing field.

Mahendra Mehta, managing director of Parle Global Technologies in Pennsylvania, said India is growing into a good competitor for the U.S. players.

“You need cheaper drugs here, you don’t want your health care costs to go up … so you would look at India to be a good partner,” Mehta said. “India does have a huge potential for outsourcing. Countries like the U.S. and European countries should be working with India because it’s a nice country to deal with in terms of English-speaking staff.”

The India Pavilion at the Interphex conference in New York City.
The India Pavilion at the Interphex conference in New York City. - ()

Besides, the Indian companies believe the U.S. is not ready to serve its own market as far as demand is concerned.

“U.S. is a bigger market and I don’t think they’ll be able to manufacture everything in the U.S. even if they plan right now. There are many companies who are already based in the U.S. now; that gives us an advantage. India has many FDA-approved plants, so we are already ready to serve the U.S. market,” Mehta said.

Manish Singhal, assistant secretary general of the Federation of Indian Chambers of Commerce and Industry, said the ambitions and frugality of Indian companies should not be underestimated.

Generally, the way the Indian mindset works is, if I develop this (product) and have to earn something out of it, let me earn $1 per (item) and sell 100 rather than just earning $10 per (item) and selling just 10,” Singhal said.

And the argument being made by the companies is that, with the downward pressure on drug pricing, it only makes sense to seek the cost effectiveness and frugality that India offers.

Or, as Singhal put it, “I mean, when we can send a satellite to the moon at one-tenth the cost, medicine is nothing.”

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Write to the Editorial Department at editorial@njbiz.com

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