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Hopes dim for a serious dialogue with the industry on new pharma policy

The most striking thing about the policy draft is, that it has good policy goals but gives little thought on the road map and challenges in meeting them.

twitter-logo E Kumar Sharma   New Delhi     Last Updated: August 28, 2017  | 21:34 IST
Hopes dim for a serious dialogue with the industry on new pharma policy

On August 30th, the department of pharmaceuticals, ministry of chemicals and fertilisers, has called for  a conference on draft pharmaceutical policy, with all the stakeholders, including the pharma industry bodies. It is a meeting many in the industry were looking forward to, as it presents them one last opportunity to raise their concerns. After all, the policy draft, that is being circulated for industry feedback, does not seem to have gone down well with many sections within the industry. But then, is a serious discussion on the issues that many have raised, likely to take place on the 30th? Not many seem to think so.

Consider the agenda for the meeting: There is very little time being given to the industry to make its case. The day-long meeting will have speeches from key government officials, followed by presentations by various ministries and finally in the concluding session, half an hour is set aside for views from the industry, where one representative from each of the pharma bodies (OPPI, IPA, BDMA, IDMA, FICCI and the CII) will get to speak, which in effect means, each industry representative will get about 5 minutes! In case you are a bit confused on what this collection of letters from the English alphabet has to do with the pharma industry, OPPI stands for the Organisation of Pharmaceutical Producers of India, IPA - the Indian Pharmaceutical Alliance, BDMA - the Bulk Drug Manufacturers of India, IDMA - Indian Drug Manufacturers' Association, FICCI - Federation  of Indian Chambers of Commerce and Industry and CII- the Confederation of Indian Industry.

Apparently, there is more time and ear from the government that the industry needs, considering that it is largely miffed with the draft policy and the manner in which it has been drafted. It is being seen as one that will end up adding to its woes at a time when it is already reeling under severe regulatory and pricing pressures, both globally and in India. The impact on the industry growth rates is already showing with the rates slipping from 14 -15 per cent to less than 10 per cent in recent times.

The most striking thing about the policy draft is, that it has good policy goals but gives little thought on the road map and challenges in meeting them.  Talk to any Indian pharmaceutical maker and there are number of questions on how the policy can actually support the industry and meet its larger goal of making low medicines available to the common man. "The policy is full of idealistic statements, paints a picture of industry as a villain, patients as poor people and the government as the lone saviour,"  says the head of a leading pharmaceutical company.  

The one big announcement in the policy is this: "Formulations produced from indigenously produced API and its Intermediates (end to end indigenous production) be given preference in government procurements. Such formulations be taken out of price control for 5 years and the price control be linked to the indigenous content of the formulations." It is an excellent thought but given the current global challenges (as the industry is hit with price erosion in its biggest market -- the US, currency volatility in emerging markets and regulatory and pricing pressures in India) can it be expected to become cost competitive overnight? After all, just a few paragraphs earlier, the policy talks of: "Today overall more than 60 per cent of APIs are sourced from other countries and in some specific APIs the dependence is 80 to 90 per cent. The situation is more alarming in case of intermediates of stages prior to APIs and key starting materials (KSMs) which are the building blocks for the drugs. As a result, our competitiveness and capability in manufacturing some of these API has also dwindled."

Part of the reason for this, industry says, is the policy draft itself: "Price cap on drugs forced the manufacturers, who had to maintain the minimum profit margins to obtain the cheapest raw material with the basic minimum efficacy/quality. This started impacting the indigenous API and Intermediates manufacturing which though much better in terms of quality assurance were nonetheless not price competitive."

The country that took advantage of this was China and today it has build global scale in APIs. We all know how India suffered during Beijing Olympics in 2008 when many of the polluting API units had to be shut in China. "Now that we have a stand-off with China, it is good to talk about end-to-end manufacturing in India, why has nothing been done so far since 2015 - the so called year of the APIs in India, the industry has been seeking Chinese-style government backing with from the government and for large scale API manufacturing but it is falling on deaf ears," complains another pharma CEO, who does not want to be identified and is keen to attend the meeting on the 30th.

When the policy draft talks about ensuring world class quality of drugs for domestic consumption and exports and about making essential drugs accessible at affordable prices to the masses, we don't get any mention of what is being done about ensuring the drug controllers across the country are equipped with enough manpower and machinery. A lot has been written about how most of the drug controllers are managing with half the staff that they ideally need to ensure effective inspection of pharmaceutical manufacturing sites and to check pharmacies.

The policy, thankfully, acknowledges the problem and talks of third party inspections and self-certification also but there is more needed. All the more because the policy says: "Public procurement and dispensing of drugs will be of generic drugs in salt names. To facilitate this, the government will pursue the policy of sale of single ingredient drugs by their pharmacopeial name/salt name."

The argument being that without focus on quality, there is risk of merely shifting control from a pharma company to a pharmacy - on which medicine to push into the market, which may again not be in the best interest of the end consumer.

One aspect of the policy draft that may need serious study and discussion could be around the issue of ending 'loan licensing" (read loosely as third party manufacturing). To what extent, it could impact on job losses is still not clear and the manner in which it is to be done and the possible safeguards.  

Which among these and other issues gets raised at the conference on the 30th in the limited time available, needs to be seen now. For, at the end of the day, everyone would want the policy to work and not end up as a collection of altruistic statements.

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