In an attempt to find new markets for its ailing drug companies, the government has come up with a plan to fund their push into making and exporting anti-HIV drugs to Africa.
The plan is part of a Rs3,240 crore investment aimed at turning around the fortunes of loss-making public sector pharmaceutical firms, including the Gurgaon-based Indian Drugs and Pharmaceuticals and the Pune-based Hindustan Antibiotics.
The two firms will lead the effort to develop and ship anti-HIV drugs. The Union ministry of chemicals and fertilizers plans to spend Rs100 crore in helping the two companies obtain approval from the World Health Organization to supply their products to global health programmes, according to Satwant Reddy, secretary in the ministry.
The firms can then tie up directly with funding agencies to supply their drugs to governments and other players in Africa and elsewhere, Reddy added.
The entry of state-owned units into the anti-HIV drugs business, estimated to be worth Rs9,000 crore, could consolidate India’s position in the market, said Shefali Chaturvedi, director and head for the Confederation of Indian Industry’s Indian Business Trust for HIV/AIDS.
The public sector companies will face stiff competition from several private-sector companies such as Cipla, Ranbaxy Laboratories, Aurobindo Pharma and Lupin, which dominate India’s exports of anti-HIV drugs to Africa.
It is estimated that funding amounting to nearly $4 billion (about Rs17,780 crore) flows into Africa to fight HIV/AIDS, tuberculosis and malaria, according to Mumbai investment bank and securities house Edelweiss Capital.
The ministry has thus far approved a Rs550 crore revival package for Hindustan Antibiotics and a Rs440 crore one for Bengal Chemicals & Pharmaceuticals .
It is in the process of approving a Rs2,250 crore package for Indian Drugs & Pharmaceuticals.
The public-sector pharma companies have combined sales of Rs250 crore, which amounts to less than 1% of the revenue of the country’s pharmaceuticals industry.