In the last three years, Prime Minister Narendra Modi has tried to lessen the burden of people in India — where the per capita out-of-pocket expenditure on health is one of the highest — by slashing the price of essential medical commodities.
Armed with a slew of reforms, the government may have sent the prices of drugs and medical devices spiralling down, but how much have these measures really helped?
Strain On StentsLast year, through drug price watch dog National Pharmaceuticals Pricing Authority, the government cut down the prices of over 680 formulations — used in essential medicines for life-threatening diseases such as HIV, cancer and cardiac arrest — by over 80 per cent.
In February this year, it further reduced prices of coronary stents by up to 85 per cent, capping the ceiling price of bare metal stents at Rs 7,260 and drug-eluting stents at Rs 29,600.
Although, these measures will greatly help patients, feel industry experts, manufacturers of medicines and stents are quite unhappy. “While the government has tried to ease the burden of the consumer, it needs to be a well thought-out process that should not hurt innovation, research and development of the industry,” says Hitesh Sharma, nation leader, life sciences at consultancy firm EY. Medical device-making multinationals Abbott and Medtronic are already withdrawing their latest stents from India, says Sharma. Reportedly, Boston Scientific may follow suit too.
The Generics Drive According to Union Minister for Chemicals and Fertilisers Ananth Kumar, the government has attained success in the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) — under which generic drugs are sold at affordable prices to masses through special kendras known as Pradhan Mantri Bhartiya Janaushadhi Kendra (PMBJK).
The current government has opened 1,320 generic medicine outlets in the country in the last three years compared to only 80 between 2008 and 2014.
The turnover from PMBJP, which was around Rs 3 crore in the first year, is likely to be around Rs 60 crore at the end of this year. This shows increasing traction for generic medicines in India against branded.
Looking at this growth, the government has signed several memorandums of understanding for opening PMBJKs with 19 state governments, NGOs and other organisations.
This year, PM Modi issued another disruptive policy which will now require doctors to prescribe generic formulations of medicines, as opposed to specific brands. The move is aimed at pruning doctors’ commissions from medicine-making companies for recommending their brand and also giving consumers the freedom to buy any brand.
Following the proposal, the Medical Council of India has issued a directive making it mandatory for doctors to prominently mention generic names of drugs in prescriptions.
“There are many pending laws that are in line to be amended — the Drugs and Cosmetics Act , the UCPMP, new regulations on clinical trials, and a new pharma policy. We hope all these will be announced keeping all stakeholders in mind,” says Sunil Attavar, president, Karnataka Drugs & Pharmaceutical Association.
Pending IssuesThe intellectual property right (IPR) infrastructure in India is a concern. In the latest annual IP index released by the United States Chamber of Commerce (USCC), India ranked 37 out of 38 countries. “Many drug makers feel India is an uncertain market. They are reluctant to come and launch new drugs in India immediately,” said Patrick Kilbride, who represents Global Intellectual Property Center at the USCC, in a meeting with BW Businessworld two months ago on the simmering discontent over the IPR infrastructure.
According to him, with US President Donald Trump at the helm now, the pressure on a strong IPR regime will go up further. So the Indian government should start paying attention.
Boost To Bulk Drugs In 2016, the government had announced bulk drug policy to reduce dependence on imports from China. Following which the imports dropped to Rs 9,120.8 crore in 2016-17 from Rs 13,853.20 crore a year ago.
But still, more than 60 per cent of the bulk drugs is imported from China. In fact, the dependence is so high that if China stops exporting, India will be damned. This needs government’s immediate attention.
The Fertiliser Segment The ministry of chemicals and fertilisers has so far announced Rs 50,000 crore in investments to revive four mothballed fertiliser plants and to extend the gas pipeline grid in eastern India. It has also slashed the retail prices of non-urea fertilisers including DAP by up to Rs 5,000/tonne.
In the coming years, the government is also planning to roll out one of its biggest subsidy reforms across the country. Under the scheme, fertiliser subsidies would be transferred to manufacturers on the basis of actual sales. The move is aimed to pave the way for implementation of direct benefit transfer.
Value of India’s Pharmaceuticals Market : Over Rs 2.4 lakh crore
Annual Growth Rate of Pharmaceuticals Market : 29%
Contribution of Generic Medicines in Total Revenue Generated: 70%
Contribution of Over The Counter Drugs in Total Revenue Generated: 21%
Contribution of Patented Drugs in Total Revenue Generated: 9%
Indian Pharmaceuticals Market is the Third Largest in Terms of Volume and 13th Largest in Terms of Value
Expected Value of India’s Pharma Exports by 2020: $40 billion
Contribution of Exports in the Total Pharma Production: 72%
