INDIA rises as global pharmaceutical giant

Published: Wednesday, June 21, 2017

The Indian pharmaceuticals market is making enormous strides and is said to be the third largest in terms of volume and 13th largest in terms of value, according to a report by Equity Master.

India accounts for 20 percent of global exports in terms of volume of generic drugs and it supplies more than 80 percent of the antiretroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome).
According to an IBEF report, the UN-backed Medicines Patent Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine Tenofovir-Alafenamide (TAF) for 112 developing countries.

The Indian pharma industry, which is expected to grow over 15 percent per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5 percent between the same period.
The market is expected to grow to US$ 55 billion by 2020, thereby emerging as the 6th largest pharmaceutical market globally by absolute size, as stated by Mr Arun Singh, Indian Ambassador to the US.

Branded generics dominate the pharmaceuticals market, constituting nearly 80 percent of the market share (in terms of revenues).

India has also maintained its lead over China in pharmaceutical exports with a year-on-year growth of 11.44 percent to US$ 12.91 billion in FY 2015-16, according to data from the Ministry of Commerce and Industry.

In addition, Indian pharmaceutical exports are poised to grow between 8-10 percent in FY 2016-17. Imports of pharmaceutical products rose marginally by 0.80 percent year-on-year to US$ 1,641.15 million.

Overall drug approvals given by the US Food and Drug Administration (USFDA) to Indian companies have nearly doubled to 201 in FY 2015-16 from 109 in FY 2014-15. The country accounts for around 30 percent (by volume) and about 10 per cent (value) in the US$ 70-80 billion US generics market.

Increased FDI flows

The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$14.53 billion between April 2000 and December 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).

The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanization, and raising healthcare insurance, among others.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.

KWE India, one-stop logistics provider

Of late, consolidation has become an important characteristic of the Indian pharmaceutical market as the industry is highly fragmented. Alongside the growth of pharma market, there has been corresponding growth in the logistics sector, specifically to do with the sensitive nature of the pharma industry.

And KWE India is one of the leading providers of end-to-end, comprehensive and outsourced logistics solutions. The company is the Indian subsidiary of Kintetsu World Express (KWE) which is part of the Kintetsu Group, a global conglomerate consisting of 130 affiliated companies with interests in a diverse range of industry verticals. KWE India was set up in 1997 with headquarters in Bangalore and regional offices in Delhi, Mumbai and Chennai.
As a one-stop, international logistics services provider, KWE India offers international freight forwarding, international sea freight forwarding, customs, handling, import and export of goods, warehousing and last-mile delivery to both B2B and B2C businesses across India.

KWE is regarded as one of the leaders in total supply chain management with its high quality and advanced logistics services and is the most preferred ‘logistics partner’ to both domestic and multinational companies in India.
KWE India offers clean warehouses; secure cages for high-value cargo and scheduled drugs; pick-pack distribution; online inventories; 24-hour security; temperature controlled storage; refrigerated trucking; full service packing and re-packing; use of free trade zones for reduction of import duties etc.

KWE is experienced in the handling of numerous pharma and medical commodities such as dry pharmaceuticals; liquids / perishables; medical stents and bandages; reagents, diagnostics; biochemical agents; medical devices and ophthalmology.

KWE India’s strength lies in its ability to offer a full-range of reliable, value-added and optimal supply chain solutions that are significantly more comprehensive than mere ‘door to door’ services offered by typical logistics companies.

Towards this end, KWE has established a joint venture with Gati Ltd, India’s leading distribution company. The Gati-KWE joint venture is aimed at combining Gati’s expertise in express distribution in the country with KWE’s freight forwarding expertise and global customer base.

In an interview with Air Cargo Update (ACU), the Deputy Managing Director of KWE India, Karthi Baskar, talks about how the company is positioning itself in India with specific reference to the expanding pharma market.
ACU: Indian pharma industry is expected to grow to US$55 billion by 2020, is the air cargo/logistics industry ready for this growth?

Karthi Baskar (Baskar): We see air cargo pharma Industry restructuring itself currently in India as our logistics/supply chain depends upon airport facilities, handling agents inside airports, airlines and reefer transportation.

With privatization of airports in Delhi, Bangalore, Hyderabad, Mumbai and investments by private players in pharma cold chain facilities, has helped the pharma industry to improve process and standards in handling pharma products. Airlines also are investing in handling pharma products in terms of special equipment, improved handling process and robust compliance standards at origin, transit and destination.

With large capital investment and incentives by the government of India in cold storage area, we can see enormous progress on cold chain warehouse and transportation. I am confident this will help grow pharma industry rapidly in coming years.

ACU: Logistics providers need to invest in infrastructure, technology, etc. How is KWE working in this specific sector of the pharma air cargo movement?

Baskar: Currently, we have invested in GDP (good distribution practices) process and certification. Our focus is more to do with complete visible process for end to end supply chain solution for pharma customers. We are strengthening as a company on our infrastructure for cross docking, handling of pharmaceutical product, providing packaging solution and using right cold storage trucks/ equipment to meet industry standards.

On the International transportation, we work on thermal blanketing, special airline equipment for cost effective solution for our customers. Our focus is more on process driven controlled environment supply chain solution for pharma customers.

ACU: There are challenges cool chain processes or facilities, complying with international regulations, and getting required? Does your company have the expertise in regulatory issues etc?

Baskar: KWE globally is a strong pharmaceutical product handling logistics company. In few of the countries like Ireland, Germany and United Kingdom, we are GDP certified and most of our warehouses are certified in countries like Japan, US, Asia-Pacific to handle pharma-ceutical customers. In terms of country-specific regulations we have pharmaceutical handling staff who are specialized in each country regulation at respective locations. In India we have competent staff who are well-versed on regulatory matters to give best solutions to our customers.
ACU: Moving temperature-sensitive products is a big challenge, how is your company equipped?

Baskar: We design supply chain solutions, customize based on customer requirements and use appropriate handling trucks, facilities, equipment’s with robust process on compliance and safety for the product during the entire handling.

ACU: You recently opened a warehouse in Hyderabad airport to handle pharma products. Could you tell us about the response from the industry, the capacity, and infrastructure to the warehouse?

Baskar: Strategically located at the country’s pharmaceutical hub, this facility will be exclusively utilized to provide logistics support for the pharmaceutical shipments – including both export and import trade. Set up in non-bonded area, the state-of-the-art facility is equipped with 24×7 temperature ambient control, CCTV, control access, racking, temperature and humidity indicators, alarm system and skilled and trained manpower to follow GDP compliant process throughout shipment handling.

The pharmaceutical companies in the region have evinced overwhelming response for utilizing the services provided by KWE at the dedicated warehouse. Following this response KWE management is keen to further expand its warehousing space and has already reserved two additional block spaces in the upcoming cargo satellite building of GMR Hyderabad.

ACU: What is unique about this warehouse?

There are limited players handling with such robust GDP process in pharma industry. GDP certification is unique and new product in India and very minimum players in India currently which will give complete process driven to pharmaceutical companies which will help to customers to meet their end user requirement in terms of managing, maintain quality and temperature to meet compliance, safety and security standards for global compliances.
ACU: We are told you are planning similar warehouses in other airports, could you give your roadmap for the future?
Baskar: Currently, we have started with Hyderabad. Our future focus will be to start the GDP certified warehouse in other pharmaceutical hub gateways in India like Mumbai, Ahmadabad, Bangalore and Chennai.