Import export scenario of India

in pharmaceutical sector

Ravi Kumar – 26

Reshu Agarwal- 11

Shashi bhusan Prasad- 58

Prateek sharma- 40

Ravi Kumar – 26

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Contents
OVERVIEW ..................................................................................................................................................... 1
Regulatory Bodies ......................................................................................................................................... 3
REGULATORY ENVIRONMENT IN INDIA ........................................................................................................ 3
GOVERNMENT INITIATIVES ........................................................................................................................... 4
Pharmaceutical Exports from India............................................................................................................... 6
EXPORTS AND ADVANTAGE INDIA ................................................................................................................ 6
Role of EXIM Bank in Pharmaceuticals sector .............................................................................................. 7
Patents Filed and Granted in the Pharmaceuticals Sector by the Indian Patent Office ............................... 9
Finance for R&D of Pharmaceutical/Biopharma companies ...................................................................... 10
R&D Expenditure of Select Indian Pharmaceutical Companies .................................................................. 11
344 Drugs banned by Ministry of Health Family Welfare ........................................................................... 11
EXPORT & IMPORT PROCESS .................................................................................................................. 13
STEPS &DOCUMENTS REQUIRED FOR EXPORT ....................................................................................... 13
Export Regulations of India-Registration ................................................................................................ 13
IMPORT REGULATIONS OF INDIA-REGISTERATION ................................................................................ 15
DISTRIBUTION SYSTEM AFTER IMPORT .................................................................................................. 16

OVERVIEW
 Pharmaceuticals are the 8th most exported and imported global product.

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 The Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in
terms of value.

 In pharmaceuticals import export business, six types of products are included and come under
following HS code – 3004, 3002, 3006, 3005, 3003 and 3001, 3004 are the most exported and imported
pharmaceutical products.

 As per the Indian Pharmaceutical exports data, it is exporting in more than 200 countries including
USA, UK, South Africa, Nigeria, Russian Federation etc. India recorded pharmaceutical export value of
USD 13042716 thousand during the year 2016.

 presently over 80% of the antiretroviral drugs used globally to combat AIDS is supplied by Indian
pharmaceutical firms.

 The pharmaceutical sector is allowed FDI up to 100% under the automatic route for manufacturing of
medical devices subject to certain conditions.

 In India Hyderabad, Mumbai, Bangalore, Visakhapatnam and Ahmedabad are the major
pharmaceutical hubs of India.

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Regulatory Bodies
 India occupies the third largest position in the world in the field of pharmaceutical industry.

 These industries are regulated by the ministry of health and family welfare & the ministry of chemical
and fertilizers

 India has a special policy for the purpose of Import an Export called as EXIM policy.

 Some organizations which regulate pharma business are:-

 World Trade Organization(WTO)

 International Trade Organization(ITO)

 World Health Organization(WHO)

REGULATORY ENVIRONMENT IN INDIA

 The Indian drug regulatory system is divided into central (federal) and state (provincial) authorities.

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  Central Licensing Authority

 The national regulatory authority of India is the Central Drugs Standard Control Organization (CDSCO)
under the Directorate General of Health Services of the Ministry of Health & Family Welfare. CDSCO is
headed by the Drugs Controller General of India, DCG (I). CDSCO has 379 staff members. There has
been a steep rise in recruitment, and staffing increased from 111 positions in April 2008 to 474
sanctioned positions currently. The mission of CDSCO is to safeguard and enhance public health by
assuring the safety, efficacy and quality of drugs, cosmetics and medical devices.

 State Licensing Authorities

 At the state level, authorities consist of Food and Drug Administrations (FDA) – one for each state –
and certain licensing authorities for the Union Territories (i.e. areas administered by the Union
Government directly). The regulation, manufacture, sale and distribution of drugs are primarily the
concern of state authorities. The state FDAs also control the quality of food articles, manufactured and
sold within the state as well as manufactured outside the state but sold in the state.

CENTRAL DRUGS STANDARD CONTROL ORGANISATION(CDSCO)

 Regulates the import and export of the drugs in the country through 11 port offices located in different
parts of the country.

 CDSCO regulates the manufacture, sale, import, import, export and clinical research of drugs in India
by certain rules and acts.

 CDSCO also works trough state authorities which regulates manufacture, sale and distribution of drugs,
licensing drug testing laboratories, approving drug formulations for manufacture, carrying out pre and
post licensing inspections, for the drugs manufactured and marketed in the respective states.

GOVERNMENT INITIATIVES
The implementation of the Goods and Services Tax (GST) is expected to be a game-changer for the Indian
Pharmaceuticals industry

 In the Union Budget 2017-18, the Department of Biotechnology (DBT) received Rs.2,222.11 crore (US$
333.31 million), an increase of 22 per cent, to continue implementing the department’s national
biotech strategy.

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  In an attempt to revive the active pharmaceutical ingredient (API) and bulk drug market in India, the
Government of India has proposed peak customs duty on the import of APIs and also plans to set up
mega drug parks to give a boost to domestic production.

 The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-
to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.

 The government introduced mechanisms such as the Drug Price Control Order and the National
Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.

INVESTMENTS

The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 14.71 billion between April
2000 and March 2017, according to data released by the Department of Industrial Policy and Promotion
(DIPP).

 The exports of Indian pharmaceutical industry to the US will get a boost in FY18, as branded drugs
worth US$ 50 billion will become off-patented.

 Private equity and venture capital (PE-VC) investments in the pharmaceutical sector have grown at 38
per cent year-on-year between January-June 2017, due to major deals in this sector.

 Indian pharmaceutical firm, Eric Lifesciences Pvt Ltd, has launched its initial public offering (IPO) worth
Rs 2,000 crore (US$ 311 million) in June 2017.

 Indian pharmaceutical company, Cadila Healthcare Ltd, is planning to raise Rs 1,000 crore (US$ 155
million) via a qualified institutional placement (QIP) of shares shortly.

 Capital International Group, a private equity fund, has acquired a three per cent stake in Intas
Pharmaceuticals Ltd from ChrysCapital Llc for a consideration of US$ 107 million, thereby valuing Intas
Pharma at approximatively US$ 3.5 billion.

 Aurobindo Pharma Ltd, has acquired four biosimilar products from Swiss firm TL Biopharmaceutical AG,
which will require TL Biopharmaceutical to supply all the developmental data for four molecules, which
will be developed, commercialised and marketed by Aurobindo Pharma

 Piramal Enterprises Ltd acquired a portfolio of spasticity and pain management drugs from UK-based
specialty biopharmaceutical company Mallinckrodt Pharmaceuticals, in an all-cash deal for Rs1,160
crore (US$ 171 million).

 Aurobindo Pharma has bought Portugal based Generis Farmaceutica SA, a generic drug company, for
EUR 135 million (US$ 144 million).

 Sun Pharmaceutical Industries Ltd, India's largest drug maker, has entered into an agreement with
Switzerland-based Novartis AG, to acquire the latter’s branded cancer drug Odomzo for around US$
175 million.
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  Kedaara Capital Advisors LLP, a private equity (PE) firm, plans to invest Rs 430 crore (US$ 64.5 million)
to acquire a minority stake in Hyderabad-based diagnostics chain Vijaya Diagnostic Centre Pvt Ltd.

 Sun Pharmaceuticals Industries Limited plans to acquire 85.1 per cent stake in Russian company
Biosintez for US$ 24 million for increasing its presence in Russia through local manufacturing capability.

 Abbott Laboratories, a global drug maker based in US, plans to set up an innovation and development
center (I&D) in Mumbai, which will help in developing new drug formulations, new indications, dosing,
packaging and other differentiated offerings for Abott's global branded generics business.

Pharmaceutical Exports from India

 INDIA has established itself as a global manufacturing and research hub. A large raw material base and
the availability of a skilled workforce give the industry a definite competitive advantage. The Indian
pharmaceutical industry is expected to grow at a compound annual growth rate (CAGR) of 22.4 per
cent to touch US$ 55 billion by 2020, from US$ 20 billion in 2015.

 India’s pharmaceutical space is dominated by generic drugs, which accounts for around 70 per cent of
the market.

 The Pharmaceutical Export Promotion Council (PHARMEXCIL) was established in 2004 by the Ministry
of Commerce and Industry, Government of India, to promote pharma exports.

Export of Pharmaceutical Products

 European Union had mandated through a Directive which came into effect from July 2, 2013 that every
exported consignment of active pharmaceutical ingredients
 (APIs) from non-EU/non listed countries shall be supported by a certificate issued by competent
authority of that country that the consignment conforms to standards of good manufacturing practices
(GMPs) as laid down in the EU or equivalent thereof.
 After due consultations with relevant stakeholders, Government of India has nominated Central Drugs
Standard Control Organization (CDSCO) as competent authority for the purpose of issuing the
certificates.
 Exports of drugs and pharmaceuticals (including APIs, formulations etc.) for the last 3 years and to EU
countries are as follows:

EXPORTS AND ADVANTAGE INDIA

 The Indian Pharmaceuticals Industry (IPI) earns around 70 per cent of its revenues from sale of generic
drugs and generates around 50 per cent of its revenues from exports.

 India is the largest supplier of generic medicines globally (20 per cent of global export volume)

 Pharmaceutical export from India stood at US$ 16.84 billion in 2016-17, and is expected to reach US$
20 billion by the year 2020.
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  US Food and Drug Administration (USFDA) approvals to Indian companies totaled 201 in FY 2015-16, up
from 109 approvals received in FY2014-15.

 India has one of the lowest manufacturing costs in the world. Manufacturing cost in India is
approximately 35–40 per cent of that in the US as installation and workforce costs are low.

 India is expected to rank amongst the top three pharmaceutical markets in terms of incremental
growth by 2020.

Role of EXIM Bank in Pharmaceuticals sector

Exim Bank has been providing support to all segments in the pharmaceutical value chain. Exim Bank’s
exposure to pharmaceutical industry as on March 2014 has been 6.24 per cent in its total credit exposure.
According to RBI’s data on sectoral deployment of Gross Bank Credit, as of March 31, 2014, Indian banking
sector’s exposure on the drugs and pharmaceutical industry had been 0.8 per cent of the total non-food credit of
the banking system, and 1.9 per cent of the total credit to the Industry Sector. Exim Bank finances the
pharmaceutical or biopharma companies to fund the research and development, new product development and
other related costs for obtaining Intellectual Property Rights/regulatory approvals in regulated overseas markets.
Financing by Exim Bank is in the form of either term loan/equity participation or a hybrid product. The Bank
supports the pharmaceutical companies in their strategic investments abroad for, inter alia, setting up
manufacturing units and for acquiring overseas companies to get access to the foreign market, technology, raw
material, brand, and IPR.

Exim Bank has been closely associated with the export efforts of Indian pharmaceutical industry, in its entire
value chain. Exim Bank has been providing support to all segments in the pharmaceutical value chain. A
schematic segment wise and program-wise representation of the companies supported by the Bank in this sector
is provided. Pharmaceutical sector is one of the focus sectors of the Bank. On the whole, Exim Bank’s exposure
to pharmaceutical industry as on 31.03.2014 is Rs 3,828 crores, a share of 6.24 per cent in total credit exposure.
According to RBI’s data on sectoral deployment of Gross Bank Credit, as of March 31, 2014, the Indian
Banking Sector had an exposure of ` 492 billion to the drugs and pharmaceutical Industry. This works out to 0.8
per cent of the total non-food credit of the banking system and 1.9 per cent of the total credit to the Industry
Sector.

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Credit Flow to Pharmaceutical Indus

The Bank has been largely supporting the Indian pharmaceutical companies by providing term loans for
domestic expansion projects and term loans for overseas acquisitions, besides loans for research and
development.

Exim Bank Supported Companies in Pharmaceutical Industry

Patents
The patents filed by, and granted to Indian companies have been increasing significantly. Indian companies
have filed a large numbers of Drug Master Files and Abbreviated New Drug Applications (ANDA) with the
US-FDA. According to the Indian Patent Office, during 2012-13, a total of 43,674 patents were filed, of which
only around 6.8 per cent were filed in the drug and pharmaceutical sector; and of the total 4126 patents that
were granted in the year, around 8.3 per cent share was for pharmaceuticals.

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Patents Filed and Granted in the Pharmaceuticals Sector by the Indian Patent Office

Patents Filed by India outside India (2000-2013)

R&D
In the recent years, Indian pharmaceutical companies have significantly increased their R&D budgets in view of
their growing focus both on regulated markets and complex molecules/therapy segments. In 2013-14, most of
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the leading pharma players spent anywhere between ` 5 billion to ` 12 billion on R&D, which represented an
increase, both in absolute terms as well as in proportion to net revenues (8-11 per cent of sales).

Exim Bank Support to Pharma Sector for R&D

Finance for R&D of Pharmaceutical/Biopharma companies

In view of several of the drugs going off-patent and high cost of R&D investment, financial assistance is
required by pharma and biopharma companies from banks/financial institutions with longer moratorium period.
The need and nature of funding differs for medium and large pharmaceutical companies. Medium-sized
companies generally have a pure debt financing requirement to finance research and development costs for
obtaining IPRs/regulatory approvals. However, large companies need finance, both by way of debt and equity
through special purpose vehicles being setup which are focused on the activity of developing products, and for
basic research work including clinical trials with the objective of obtaining IPRs/ product approvals from
overseas regulatory authorities. Accordingly, Exim Bank finances the pharmaceutical or biopharma companies
to fund the research and development, new product development and other related costs for obtaining
Intellectual Property Rights/regulatory approvals in regulated overseas markets. Financing by Exim Bank is in
the form of either term loan/equity participation or a hybrid product.

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R&D Expenditure of Select Indian Pharmaceutical Companies

344 Drugs banned by Ministry of Health Family Welfare

A gazette notification by Ministry of Health and Family Welfare has banned 344 medicines of fixed drug
combinations. The Health Ministry banned 344 fixed drug combinations through a gazette notification. The ban,
which comes into effect immediately, follows recommendations of an expert committee formed to examine the
efficacy of these drug combinations. These drugs include several common cough syrup solutions, analgesics
and antibiotic combinations, many of which are sold over the counter. Some of them are:

 fixed dose combination of Aceclofenac + Paracetamol + Rabeprazole

 fixed dose combination of Nimesulide + Diclofenac
 fixed dose combination of Nimesulide + Cetirizine + Caffeine
 fixed dose combination of Nimesulide + Tizanidine
 fixed dose combination of Paracetamol + Cetirizine + Caffeine
 fixed dose combination of Diclofenac + Tramadol + Chlorzoxazone

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 fixed dose combination of Dicyclomine + Paracetamol + Domperidone
 fixed dose combination of Nimesulide + Paracetamol dispersible tablets
 fixed dose combination of Paracetamol + Phenylephrine + Caffeine
 fixed dose combination of Diclofenac + Tramadol + Paracetamol
 fixed dose combination of Diclofenac + Paracetamol + Chlorzoxazone + Famotidine
 fixed dose combination of Naproxen + Paracetamol
 fixed dose combination of Nimesulide + Serratiopeptidase
 fixed dose combination of Paracetamol + Diclofenac + Famotidine
 fixed dose combination of Nimesulide + Pitofenone + Fenpiverinium + Benzyl Alcohol
 fixed dose combination of Omeprazole + Paracetamol + Diclofenac
 fixed dose combination of Nimesulide + Paracetamol injection
 fixed dose combination of Tamsulosin + Diclofenac
 fixed dose combination of Paracetamol + Phenylephrine + Chlorpheniramine + Dextromethorphan +
Caffeine
 fixed dose combination of Diclofenac + Zinc Carnosine
 fixed dose combination of Diclofenac + Paracetamol + Chlorpheniramine Maleate + Magnesium
Trisillicate
 fixed dose combination of Paracetamol + Pseudoephedrine + Cetrizine
 fixed dose combination of Phenylbutazone + Sodium Salicylate
 fixed dose combination of Lornoxicam + Paracetamol + Trypsin
 fixed dose combination of Paracetamol + Mefenamic Acid + Ranitidine + Dicyclomine
 fixed dose combination of Nimesulide + Dicyclomine
 fixed dose combination of Heparin + Diclofenac
 fixed dose combination of Glucosamine + Methyl Sulfonyl Methane + Vitamin D3 + Manganese +
Boron + Copper + Zinc
 fixed dose combination of Paracetamol + Tapentadol
 fixed dose combination of Tranexamic Acid + Proanthocyanidin
 fixed dose combination of Benzoxonium Chloride + Lidocaine
 fixed dose combination of Lornoxicam + Paracetamol + Tramadol
 fixed dose combination of Lornoxicam + Paracetamol + Serratiopeptidase
 fixed dose combination of Diclofenac + Paracetamol + Magnesium Trisilicate
 fixed dose combination of Paracetamol + Domperidone + Caffeine
 fixed dose combination of Ammonium Chloride + Sodium Citrate + Chlorpheniramine Maleate +
Menthol
 fixed dose combination of Paracetamol + Prochlorperazine Maleate
 Combikit of 3 tablets of Serratiopeptidase (enteric coated 20000 units) + Diclofenac Potassium & 2
tablets of Doxycycline
 fixed dose combination of Nimesulide + Paracetamol Suspension
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EXPORT & IMPORT PROCESS

STEPS &DOCUMENTS REQUIRED FOR EXPORT

1.Receipt of indent

2.Receipt of license for export

3.Procurement of goods.

4.Packing and labeling

5.Appointment of forwarding agent

6.Dispatch of goods

7.Foreign customs permit

8.Shipping order

9.Export duty and shipment bill

10.Dock dues or challan

11.Loading the goods

12.Mate’s receipt

13.Bill of loading

14.Marine insurance

15.Forwarding agent advice

16.Preparation of export invoice

17.Payment

18. Letter of credit

Export Regulations of India-Registration

 It was compulsory for every exporter to obtain an exporters' code number from the Reserve Bank of
India before engaging in export.

 Registration with Regional Licensing: Authorities (obtaining IEC Code Number) The Customs
Authorities will not allow you to import or export goods into or from India unless you hold a valid IEC
number.

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  For obtaining IEC number you should apply to Regional Licensing Authority in duplicate . Before
applying for IEC number it is necessary to open a bank account in the name of your company / firm
with any commercial bank authorized to deal in foreign exchange. The duly signed application form
should be supported by the following documents:

 Bank Receipt (in duplicates)/Demand Draft for payment of the fee of 1,000 USD. Two copies of
Passport size photographs of the applicant duly attested by the banker to the applicants.

 A copy of Permanent Account Number issued by Income Tax Authorities. If PAN has not been allotted,
a copy of application of PAN submitted to Income Tax Authorities.

 The number should normally be given within 3 days provided the application is complete in all
respects and is accompanied by the prescribed documents.

 An IEC number allotted to an applicant shall be valid for all its branches/divisions as indicated on the
IEC number.

 Acquire Export License.

 Compulsory Quality Control & Pre shipment Inspection by their own nominated agencies.

 In-Process Quality Control (IPQC) The inspection is done at various stages of production. The exporter
has to get his unit registered as "Export Worthy" and keep record of processing and production.
Inspection by the officers of Export Inspection Agency is done from time to time.

STEPS &DOCUMENTS REQUIRED FOR IMPORT

Obtaining import license

2. Foreign exchange

3. Placing the indent

4. Dispatch of goods by export agent

5. Obtaining shipment documents

6. Appointment of clearing agent

7. Endorsement of delivery

8. Payment of import duty dock dues

9. Taking delivery of goods

10.Keeping goods in warehouse

11. Dispatch of goods by clearing agent

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12.Receipt of documents

13.Taking the delivery

IMPORT REGULATIONS OF INDIA-REGISTERATION

 License in form 10 is to import drugs excluding those specified in schedule X

 License in form 10-A to import drugs specified in schedule X.

 Registration certificate means a certificate issued under rule 27-A by licensing authority in form 41 for
registration of premises and drugs manufactured by manufacturer meant for import in to and use in
India. Forms and manner of application for import license:

 An application for an import license shall be made to the licensing authority in form 8 for drugs
excluding those specified in schedule X .

 Fee for license:- Applicant shall make a payment of 1500 USD (or its equivalent to Indian Currency), as
registration fee for the Manufacturing premises. Applicant shall make an payment of 1000 USD (or its
equivalent to Indian Currency), as registration fee for a single drug and additional fee of 1000 USD for
each additional drug in case the manufacturing site remains the same. Application for import license
shall be accompanied by a copy of registration certificate.

 A fee of 250USD shall be paid for a duplicate copy of license issued if original is damaged or lost.

 A single application be made and a single license may be issued in respect of import of more than one
drug or class of drugs manufactured by same manufacturer.

 Premises where imported substance will be stocked are equipped with proper storage. The licensee
shall allow any inspector authorized by licensing authority in that behalf to enter with or without
notice any premises where the imported substances is stocked to inspect the means if any employed
for testing substance and to take sample.

Distribution Channel & Partners

MANUFACTURER

CFA

STOCKIST

PHARMACY

RETAIL

CUSTOMERS

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DISTRIBUTION SYSTEM AFTER IMPORT

References
 https://pharmafranchisehelp.com/2016/03/documentation-required-for-exporting-pharma-
products.html
 https://www.eximbankindia.in/Assets/Dynamic/PDF/Publication.../39file.pdf
 ijpsr.com/bft-article/regulatory-process-for-import-and-export-of-drugs-in-india
 www.pharmatutor.org/pharmapedia/banned-drugs-in-india-manufacture-sale
 https://www.nhp.gov.in/Complete-list-of-344-drugs-banned-by-the-Ministry-of-Health-Family-
welfare_pg

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