Establishment of Formulations

Manufacturing Facility

Pharmaceuticals
Government of Gujarat
Contents

Project Concept 3
Market Potential 6
Growth Drivers 9
Gujarat – Competitive Advantage 10
Project Information 11
- Location/ Size

- Infrastructure Availability/ Connectivity

- Manufacturing Process

- Key Players

Project Financials 16
Approvals & Incentives 17
Key Department Contacts 19

Page 2
Project Concept

Drug Manufacturing: Overview

 Entails manufacture, extraction, processing, purification, and packaging of chemical materials to

be used as medications

Primary Production of active ingredient or drug

processing (API)
Classified in two
stages
Secondary Conversion of API into finished
processing products suitable for administration
(formulations)

 Secondary processing results in tablets, capsules, liquids (solutions, suspensions,

emulsions, gels, or injectable), creams and ointments (usually oil-in-water emulsions)
and aerosols (which contain inhalable products or products suitable for external use)

Drug segmentation based on molecule type

Large Molecules Small molecules

(Biologics / Biosimilar)

Structure Extracted from semi-synthesized Chemically

or biological sources synthesized

Production Sophisticated production process Mass produced

Method of Injected or parenteral Oral dosage

administration administration
90-95% below
Generic price 24-80% below branded product*
branded product*
Note: *The percentage reduction in prices varies from country to country
Source: IBEF, IFC, “Make in India can India be a hub for the 200 billion worth biosimilars opportunity,” The Economic
Times, 18 February 2016, OPTUM, Pharmaletter

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Project Concept

Facilities in the Proposed Drug Manufacturing Plant

For the proposed drug manufacturing plant, APIs / bulk drugs will be procured from bulk
drug manufacturers based in Gujarat

 The facility will be in alignment with international guidelines such as the WHO
good manufacturing practise (GMP) standards
Tablet Facility  The facility will have hygiene zones such as 'O' Area for products exposed to
environment; 'E' Area for products in close containers. Entry from 'E' to 'O'
area will be restricted by separate gowning procedure

 The facility will undertake encapsulation using hard gelatin and soft gelatin
Capsule
Facility  Hard gelatin will comprise pellet filling, tablet filling and a combination of
powder/pellet and powder/ tablet filling

 The facility will undertake packaging in the form of blister (aluminium – PVC /
PVDC), strips (aluminium - aluminium foil), cold forming (aluminium –
aluminium), pouch packaging (triple laminated foil) and vials / bottle packaging
Packaging
 All primary packaging will be in 'O' Area while secondary packaging will be in E
Facility
area
 Each machine will be in a closed cubicle with connection to dust extraction
system

 The proposed facility would have a Quality Control department which can
Quality perform visual, dimensional, mechanical and analytical testing
Control
Facility  Testing would be performed in laboratories with ISO 9001-2008 procedures,
meeting the requirements of ISO, USFDA / MHRA / WHO-cGMP

 SCM activities will include: production planning, inventory control, warehousing

and bonded store room management, and information technology to generate
EIS and MIS reports for analysis.
Supply Chain
Management  The facility will coordinate with procurement division for timely availability of
(SCM) Facility inputs and with marketing department to make all products available as per
the market requirements. It will also coordinate with C & F Agents and Cargo
Handling Agents to distribute products in the domestic and international
markets.

Note: EIS is executive information system, MIS is management information system

Source: Torrent Pharmaceuticals

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Project Concept

Certification for Quality Adherence

Number of formulation facilities in Gujarat with certifications from regulatory bodies of

different countries

US FDA MHRA
Region with plants TGA approved PICS approved
approved approved
Ahmedabad 11 9 7 4
Bharuch 2 3 2 2
Bhuj 1
Godhara 2 2 2 2
Mehsana 1 1
Nadiad 1
Surendranagar 1 1 2
Vadodara 1 1
Valsad 1 1
Grand Total 18 16 14 12

For production and quality assurance, the proposed facility will adopt guidelines of good
manufacturing practice (GMP)

Recently, Central Drugs Standard Control Organization (CDSCO) is sending staff to drug
manufacturing hubs to get them trained in GMP

The proposed facility will:

 Maintain clean and hygienic manufacturing area

 Have controlled environmental conditions to prevent cross contamination of drug from
adulterants
 Follow manufacturing processes clearly defined and controlled
 Validate all critical processes to ensure consistency and compliance with specifications
 Ensure instructions and procedures are written in clear and unambiguous language
 Maintain records during manufacturing process and note deviations
 Ensure systems are available for recalling any batch from sale or supply
 Ensure complaints about marketed products are examined, the causes of quality defects are
investigated with appropriate measures taken
Note: US FDA is US Food and Drug Administration; MHRA is Medicines and Healthcare products Regulatory Agency of
UK; TGA is Therapeutic Goods Administration of Australia; PICS is Pharmaceutical Inspection Co-operation Scheme for
European Union
Source: WHO, Fierce Pharma, Government of Gujarat

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Market Potential

India Drug Manufacturing Overview

Indian Pharmaceutical Market
(INR crore) Drug manufacturing industry is concentrated
250000 by generic drug manufacturers.
2,04,000  Indian pharmaceutical industry accounts for
200000 the 2nd largest number of Abbreviated New
150000 Drug Applications (ANDAs)
100000 85,680
Most generic manufacturers are contract
50000 research and manufacturing service providers
(CRAMS)
0
 There are over 1,000 players in the CRAMS
2009 2015
segment estimated to contribute INR54,400
Source: Make in India crore in 2015, up from INR25,800 crore in
Conversion rate: 1 USD = 68 INR 2012

India – Global Ranking and Market Share

Production activity: 2015

Globally, India, as a producer, is among the India ranks as the 4th largest generic
top six pharmaceutical producers producer in the world

3rd Pharma producer by volume with 10% global market share

14th Pharma producer by value with 1.5% global market share

Export activity: 2015

India exported pharma products Generics accounted for Generic exports

worth INR96,000 crore in FY16 to ~72% of total pharma grew at a CAGR of
over 200 countries. The exports grew exports in FY14 19% over 2005-2015
at 9.7% y-o-y

1st Formulations by volume (with 20% global market share)

12th Formulations by value (with 14% global market share)

17th Bulk actives and dosage form by value

Source: Make in India, IBEF, Department of Pharmaceuticals, “Indian generic exports to decline 1012 in next 5 years,”
Mint, 17 May 2016

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Market Potential

Gujarat Pharmaceutical Market

Gujarat Formulation Exports
 Turnover of Gujarat pharmaceutical
(INR crore) industry was worth INR43,400 crore
20,000 in FY16
16,683
14,888 14,888 14,556 14,627
15,000
 Pharmaceutical exports from Gujarat
10,000 valued at INR19,900 crore in FY16
6,939
5,000  Export destinations: African
Countries, USA, European Union,
- Philippines, Sri Lanka, Thailand
2011 2012 2013 2014 2015 2016
Source: Government of Gujarat
Conversion rate: 1 USD = 68 INR

State manufactures and exports generic drugs, intricate vaccines, r-DNA products, cytotoxic
drugs external preparations, sex hormone drugs, small and large volume parenteral, APIs, hi-
tech cardiac stents, bio-pharma products among others

Manpower Employed in the Manufacturing Licenses Issued

Pharma Sector in 2016
31000 30,468

30000 390

29000
8
28000 679
27,029 26,881
27000 2,338

26000

25000

Allopathic Ayurvedic
Technical Non-Technical Field Staff
Homeopathic Cosmetics

Source: Government of Gujarat

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Market Potential

Global Pharmaceutical Manufacturing Industry

 Increased demand for healthcare and medications, especially from emerging
economies
 Illness prevention programs by International organisations (WHO) and governments
DRIVER requiring generic products

USD 1.3t USD 6.2b

Pharmaceutical manufacturing Biosimilar market by 2020
industry by 2018 growing at CAGR of 22.1%
between 2015-2020

Indian Pharmaceutical industry

Government initiatives such as “Pharma Vision 2020” will provide boost to the pharmaceutical
industry.
Pharma Vision 2020 aims to make India a global leader in end-to-end drug manufacturing. The
government will provide support in the form of infrastructure, R&D and venture fund for research in
the public and private domain.

Indian Pharmaceutical Market

(INR crore)

4,00,000 3,74,000  Indian pharma market is expected to grow to

3,50,000 INR3,74,000 crore by 2020
3,00,000  Exports are expected to reach INR2,72,000
crore by 2020
2,50,000
2,04,000
2,00,000
1,50,000
 Exports of formulation expected to grow at a
1,00,000
CAGR of 10.5%-12.5% between 2015-2020
50,000
-
2015 2020

Source: Make in India (base case considered)

Conversion rate: 1USD = 68 INR

Source: Make in India; Market and Markets; Department of Pharmaceuticals; “Global pharma sales reach above 1
trillion,” Thomson Reuters

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Growth Drivers

Growth in drug manufacturing sector expected to be driven by increasing

investments, outsourcing, exports and government’s increased focus on the
sector
Domestic factors

Increase in generics demand because of wide spread awareness of generics among

people and government increasing access to quality products through Jan Aushidhi
stores which promotes generics to cater to masses

Increased public funding for disease eradication programmes and expanding

healthcare expenditure including a health coverage scheme and the proposed
universal healthcare programme

Rising affordability owing to reasons such as rise in disposable income, growing

market for chronic illnesses and diagnostics, and price regulation of overpriced drugs.
Consumerism increased owing to wider insurance coverage and penetration of
pharmacies in rural areas
Modernisation and expansion of the Healthcare sector due to advanced technology
capability and increase in government hospitals. Over USD200 b expected to be spent
on medical infrastructure in the decade starting 2013

Global factors

Cost effective manufacturing providing competitive edge to foreign companies

witnessing low margins due to pricing pressure by their country government. Such
companies are manufacturing products to be exported to their primary markets. Cost of
production in India is lower by 65% in US and 50% in Europe

Increased global demand for formulations: Increased demand for generics due to
public healthcare reforms in US and Latin countries. The ~USD80b Latin American
market is expected to touch USD100 b by 2020
 Demand supply gap in US and Latin America leading to increased export to these
countries. Since 2011-12, export of formulation to Latin America increased two fold to
USD680m in 2014-15
Source: Department of Pharmaceuticals, Make in India, “A billion dollar destination for Indian pharma exports,” Financial
Express; Brand India pharma

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Gujarat - Competitive
Advantage
Gujarat Drug Manufacturing Industry Overview

Ahmedabad cluster
Formulations, APIs, Bharuch – Ankleshwar
Biologicals, CRO cluster
API, Formulations, Vaccines
Vadodara cluster
Formulations, Vapi – Valsad cluster:
Biogenerics Formulations, API, Device
and Diagnostics

Gujarat is an Established Manufacturing Base for Drugs

Home to ~40% of pharma

~35% of India’s drugs
produced
Only manufacturer of
doxorubicin HCL liposome
injection globally at present
Only manufacturer of vitamin
C and dapsone in India
Over 30% of India’s drug
machinery manufactured in
sector turnover in FY16
the country
28% of India’s drug export in
40% of CRAMS companies in
FY14 (40% bulk and 60%
India
formulations)
Home to 255 WHO-GMP
certified manufacturing
facilities in India of which 155
facilities are formulations

Advantages in Gujarat

 Gujarat is the one of the power surplus states in the country as a result this helps
bring in huge amount of investment from the industries

Flourishing economy
 Gujarat contributes 7.2% of the Nation’s GDP and shows leadership in many areas of
manufacturing and infrastructure sectors. Gujarat’s SDP (State Domestic Product) at
current price registered a growth of 11% during the year 2014-15.

Easy availability of raw materials and equipment

 Many key industrial clusters such as API and plant machinery are located in close
vicinity of industrial hub. Gujarat is home to ~35-40% pharmaceutical machinery
produced in India
Source: IBEF

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Project Information

Potential Options for Site Locations

1. Vadodara

2. Dahej SEZ in Bharuch district

3. Vapi – Valsad district

1
2

Proximity to ports 3
Accessibility to API
 India imports 70-80% of clusters
API requirement from  Proximity to Bharuch –
China Alkeshwar and Vapi – Valsad
 Large component of final
product exported

Key highlights for the plant

9,240 sq meter with built-up area of 6,600 sq

Area
meter

1450m tablets, 150m capsules and 7.5m dry

Expected Capacity
syrup per year

Estimated Cost INR 40.6 crore

Key Players

Cadila Healthcare Sun Pharmaceuticals Torrent Pharmaceuticals

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Project Information
Logistics & Connectivity
Gujarat has an extensive outlay of robust physical, social and industrial infrastructure,
which makes it an excellent investment destination.
Rail
 Gujarat has a total railway length of 5,257
km (8.25% of India)
 Mumbai-Ahmedabad bullet train project
planned with investment of USD 16.58b
 Ahmedabad metro rail project construction to
begin in 2015-2016 with USD 101.3m budget
 Govt of Gujarat further plans to invest USD
1.65m in regional rail projects
Air
 The state has 18 domestic airports (the
highest in any state) and one international
airport.
 During 2014-15, the Ahmedabad airport
handled 59,313 thousand tonnes of freight.
Freight traffic at Vadodara and Rajkot
measured 966 tonnes and 79 tonnes
respectively during April-September, 2015.
 Utility
Water
 Gujarat has a state-wide “water supply grid”
spread across 1,20,769 km that aims to
serve 75% of Gujarat’s population.
 In the state budget for 2015-16, USD 83m
was allocated for bulk water supply schemes
and USD 574m was allocated for improving
the infrastructure of existing water supply
systems
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Road
 Gujarat has a wide road network of around
 77,030 km. Of these, 95% roads are
surfaced, all-weather roads.
 In 2015-16 budget, the state government
further plans to invest USD 8.3m in a four-lane
road joining Vadodara- Ankleshwar, USD 2.7m
in construction of expressways and USD
81.4m in resurfacing roads
Port
 The state has one of the strongest port
infrastructures in India, with 42 ports(21% of
India’s ports are in Gujarat), including one
major port at Kandla and 41 minor ports, along
a 1,600 km coastline.
 It is the first state in India to take up port
privatisation. Gujarat Maritime Board, has
developed port privatisation models such as
private/joint sector ports, private/captive jetties
Power
 Gujarat has 24-hour 3-phase uninterrupted
power supply throughout the state, with
installed power capacity of 29,293
MW(10.38% of India’s overall power
capacity)
 The state has surplus power to the tune of
2000 MW
Project Information
Manufacturing process–Small molecule

Manufacturing Process of Tablets and Capsules

Weighing of API and Pulverizing and Blending/mixing

1 2 sieving 3
excipient and granulation

Dispensing is the first step To eliminate oversize Powders placed in a mixer

wherein weight of each
ingredient is determined
according to the dose.
4 Drying
contamination, ingredients to ensure uniform mix of
passed through sieves. API with excipient. Later it
is mixed with water to
form granules.
Compression or
5 Lubrication 6
encapsulation

Granules are dried in a Small quantity of Powder in compressed

fluid bed drier with fan lubricants added to into tablets or filled in
facing upwards. This improve powder gelatine capsules.
breaks up oversized processing properties and
granules and ensures reduce friction.
uniformity in size.
Coating or
7 8 Packaging 9 Storage
polishing

The tablet may be coated Finished product packed The packaged product is
and capsule may be in two steps – inner stored in warehouses.
polished. packaging comprising
aluminium foil or PVC,
external packaging
comprising wrapper and
package insert.

Key Equipment Required for Stages of Production*

 Mechanical and turbo Sifter  Coater
 Communiting mill  Blister Packing Machine
 Drum and cage Blender  Strip Pack Machine
 Rapid Mixer & Granulators  Carton Printing Machine
 Roll Compactor and Fluid Bed Dryers  Pouch Pack Machines
 Fluidized Bed Processor  Cartooning machine
 Compression Machines  Lifting & Positioning Device
* List not exhaustive  Tipplers
Source: NJC Pharma, Syncom Helathcare

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