Pulse

Once crown jewels, pharma PSUs stare into the sunset

PT Jyothi Datta | Updated on January 12, 2018

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Policy apathy, indecisiveness, lack of investment in upgrade and tech manpower have taken a toll on the public sector drug-making firms

A cursory glance at Hindustan Antibiotics Ltd (HAL), Indian Drugs & Pharmaceuticals Limited (IDPL) or Bengal Chemicals & Pharmaceuticals Limited (BCPL) will reveal the rich history of the pharma PSUs in the country.

HAL is the first public sector drug manufacturing company set up by the Government in March 1954. IDPL is the largest central pharmaceutical public sector unit (PSU) with plants at Rishikesh, Gurugram and Hyderabad and two subsidiary units at Chennai and Muzaffarpur.

“The vision of first Prime Minister of India, Late Pandit Jawahar Lal Nehru on the Indian drug industry was that ‘the drug industry must be in the public sector’. I think an industry of the nature of the drug industry should not be in the private sector anyhow,” says a note on IDPL's homepage.

Late in December 2016, though, a different decision was taken. A Union Cabinet meeting chaired by Prime Minister Narendra Modi gave its go ahead for the “need-based sale of surplus land of four pharmaceutical PSUs.” And once this was done to settle outstanding liabilities, steps would be taken to close down IDPL and RDPL (Rajasthan Drugs and Pharmaceuticals Ltd). And HAL and BCPL would then be assessed for a strategic sale.

Interestingly, BCPL was established in April 1901 by scientist and entrepreneur Acharya Prafulla Chandra Ray, touted to be India's first chemical and pharmaceutical company. In December 1977, its management was taken over by the Government and it was nationalised in December 1980.

The pharma PSUs went through a long cycle of losses, became sick and their rehabilitation and revival plans did not take off. Soon a proposal emerged to utilise their land for other purposes. When last heard, the Department of Pharmaceuticals officials were planning to develop clusters here for bulk drug production.

A complete shutdown though is a disconcerting thought, say public health watchers, who fear its ramifications on the country’s health and medicine security.

New life

“We have requested the Government to not go in for disinvestment, as in the long run we should be able to protect our public health,” says Ashwani Mahajan, Co-Convenor of Swadeshi Jagran Manch, the economic wing of the Rashtriya Swayamsevak Sangh (RSS). The Government should think in terms of giving it a “new life” by using the land and augmenting the production of essential drugs and active pharmaceutical ingredients (used in making medicines), he adds. Pharma PSUs can help in becoming self-sufficient on APIs, he says, referring to the present reliance on China for APIs.

The Cabinet’s decision comes even as the Government campaigns for “Make in India”. In fact, pharma PSUs can feed the Government’s Jan Aushadhi chain of generic drug stores, set up to give people quality drugs at low prices. “Pharma PSUs are important to support pro-poor public health programmes,” adds Mahajan.

Having run IDPL in 2006, Dr Jayashree Gupta recalls how “people were in coma” and the “plant was like a ghost house” because of the prevailing environment of indecisiveness.

But a little attention in terms of upgrading machinery and getting technical manpower and production increased, reflecting in sales too increasing from ₹5 crore to ₹110 crore, she says.

“There were assets that could be put to better use. It is a national asset. IDPL has about 2,000 acres of land, but its production is not commensurate with assets,” she points out. Whether the Government should be in the business of running such an enterprise or not is another question. But the biggest problem then was indecisiveness, a decision needs to be taken one way or another, she says.

Pharma PSUs have suffered because of policy apathy, says a policy expert, adding that it all comes down to its management. The number of employees decreased from several thousands to a few hundreds and fresh recruitments were not allowed. It is not possible to run just with contract labour, with no funds or research, says the expert.

Having been jewels in the crown, India's phama PSUs now stare into the sunset.

Published on January 20, 2017

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