The company offers the plan both in cashless and reimbursement form and will give coverage against hospitalisation and outpatient treatment, reports Haider Ali KhanApollo Munich on Tuesday (28 July) launched an exclusive health insurance plan against dengue at an affordable cost of Rs 444 a unit. The 'Dengue Care' was launched in presence of brand advocate and former Indian cricket skipper Sourav Ganguly at a function in New Delhi. The product available at Rs 1.2 per day entails onetime payment of Rs 444 and provides Rs 50,000 inpatient and Rs 10,000 OPD coverage, the company said. The onset of the monsoon in India brings mosquito related diseases such as dengue. In 2014, there were over more than 40,000 dengue cases reported in India. However, the estimated number of unreported cases is 6 million.The dengue outbreak is prevalent during June and runs up till November, and results in increase in medical expenses for families across the country. On an average, hospitalisation for dengue treatment costs an individual Rs 35,000. "The diagnostic cost for dengue comes in the range of Rs 5,000-10,000 depending upon the locality of the patient. This is the first OTC (over the counter) product in India that covers infectious disease. "It serves multiple segments of people--those who never bought a health policy but have heard about dengue and those who already have a health insurance. It is a one premium plan for all ages," said Antony Jacob, CEO, Apollo Munich Health Insurance during a press conference. Citing example of his daughter, Ganguly urged everyone to pledge platelets to help people suffering from dengue. He further said that dengue is often supposed to strike those living in and around slums, but it is not necessarily true. Dengue mosquito breeds in dirty water and they can infect anyone. The product will also cover expenses of up to Rs 10,000 for diagnostic tests, consultation, home nursing and pharmacy. Apollo Munich offers the plan both in cashless and reimbursement form and will give coverage against hospitalisation and outpatient treatment.
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India's Glenmark Pharmaceuticals' proposed generic version of Bayer AG's Finacea, a gel for treating the common skin condition rosacea, infringes Bayer's patent, a U.S. court ruled on Monday. The federal court in Wilmington, Delaware said Glenmark's proposed gel would be absorbed into the skin in a similar way to Finacea, violating Bayer's patent. Germany's Bayer had sued Glenmark in 2013 after Glenmark filed an application to market a copycat version of the $95 million drug in the United States. (Reuters)
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Acquisition to help Lupin scale up in the US generic market and broaden the product pipeline, says C H UnnikrishnanDrug maker Lupin Ltd said on Thursday (23 July) that it will acquire New Jersey-based generic drug maker and drug researcher GAVIS Pharmaceuticals LLC and Novel Laboratories Inc for about $880 million (Rs 5,000 crore). Lupin, which posted a decline in sales and net profit for the quarter ended June 30, said this acquisition will help it scale up in the US generic market and broaden the product pipeline in dermatology, controlled substance products and other high-value and niche generics. For the June quarter, Lupin posted a 17 per cent drop in net profit at Rs 525 crore for the quarter as compared to the year-ago quarter's Rs 625 crore. This drop in profit was mainly due to fall in sales in the US market. Its sales decreased to Rs 3226 crore in the June quarter from Rs 3370 crore a year ago. “Slowdown in approvals in the US dampened growth during the quarter, even as the company continues to improve on gross margins," said Nilesh Gupta, managing director. "(But) we remain focused on evolving our research pipeline, ensuring compliance, operational excellence and acquiring meaningful assets,” he added. The acquisition in the US will bring to Lupin a highly skilled US-based research organisation which would complement its US inhalation drugs research facility based in Florida. GAVIS’s manufacturing facility will become Lupin’s first manufacturing site in the US. GAVIS is currently a privately held drug maker, which is specialised in formulation development, manufacturing and distribution of generic medicines. GAVIS had a sales of $96 million in financial year 2014 and currently employs some 250 people. It also has some 66 new products in the approval stage and a pipeline of at least 65 products under development. The acquisition creates the 5th largest portfolio of drug approval filings for Lupin with the US FDA, addressing a total market worth $63.8 billion. "This is a pivotal acquisition for Lupin as it aligns with our goal to expand and deepen our US presence," said Lupin's cheif executive officer Vinita Gupta. "GAVIS has a strong track record of delivering highly differentiated products in a short time and is poised for continued strong growth as it delivers on its existing pipeline. Its capabilities and pipeline are an excellent complement to Lupin," she said. According to Vinita Gupta, since the acquisition also accelerates Lupin’s entry into niche areas like controlled substances and dermatology, the company is confident that its proven commercialisation capabilities, vertically integrated manufacturing operations and supply chain strengths will accelerate GAVIS’s growth. "The acquisition is expected to be accretive to the earnings from the first full year of operations. In addition to the compelling strategic fit, there is a strong cultural fit between GAVIS and Lupin’s entrepreneurial spirit and values,” she added “This is a time of globalization for the specialty pharmaceutical industry and GAVIS is well positioned to capitalize on this exciting opportunity," says Gavis's founder and chief executive officer Veerappan Subramanian. Joining forces with Lupin will help realise our vision of building a broader, research-based high value, specialty business through organic growth, he said.
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Most pharmaceutical companies in India – both multinationals and domestic – are still shying away from leveraging the huge opportunities that exist on the digital platforms, says a study conducted by D Yellow Elephant, a digital marketing advisory. The "Indian Pharma Digital Health Report 2015", released by the agency analyzes 40 pharmaceutical companies in India across 10 key digital parameters, ranging across websites, apps and 10 social media platforms, namely Twitter, Facebook, LinkedIn, YouTube, Google+, Instagram, Pinterest, Vine, Slideshare and Blogger. The report has segregated all firms in key buckets of Digital Primes, Aspirants and Onlookers basis analyzes of presence, engagement, response, and consumer followership among few key parameters. "The pharmaceutical sector in India, whether Indian companies or global players, are atleast 5-7 years lagging behind their global counterparts on digital engagement", said Aman Gupta, managing director of D Yellow Elephant. "If compared to other sectors, the time lag could go upto 10 years and above", he adds. The survey also revealed that some of these companies, though lagging behind in India, are seen proactive in using digital platforms to engage with healthcare professionals (HCPs) and patients abroad. "The report is an attempt to help the pharmaceutical sector entities in India catch up on the time gap, identify the loopholes and help them incorporate digital medium in part of the decision making process", Gupta states. Highlighting the key findings of the report, Chandni Dalal, Lead, Digital Strategy at D Yellow Elephant said, "Out of 40 companies surveyed, only 9 companies managed a score above 50 over a scale of 100 points. This shows the reluctance to effectively engage with their stakeholders on the digital platform." "The report is an attempt to underline the opportunities that exist and draw a roadmap for these pharmaceutical companies in India to engage better with the HCPs, and the patient community," she said, that with the advent of smartphones across geographies, it is high time that the potential is realized. "What better way than effectively use these platforms to bridge the gap to healthcare access in a country like ours," she explained. According to Dalal, "Some of the results have been predictive with LinkedIn emerging as the most popular social media platform, with 95 per cent presence; but only about 14 companies showing an active engagement. For their part, pharmaceutical companies in India are venturing on the digital highway, but basic building blocks like having an India specific website is still amiss.” Only 30 per cent companies have an India specific website. In the age of quantified self, Indian patients and HCPs are exhibiting an expectations market, with the advent of digital health, big data and dialogue exchange; Indian pharma has long stayed behind the curve on social media.
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The Indian Consumer Healthcare market is currently a $4 billion market and is growing at about 15 per cent annually, says CH UnnikrishnanDrug maker Cipla Ltd said on Tuesday (21 July) that Fidelity Growth Partners India and US-based Fidelity Biosciences have made an investment in its newly launched consumer health Care (CHC) business. The consumer health business, which is part of its new initiatives under Cipla New Ventures headed by promoter Y K Hamied's niece and the company's executive director Zamina Vaziralli, has been mainly targeting India's growing over-the-counter market in the healthcare space. “Partnering with a long-term strategic and financial investor like Fidelity Growth Partners on this journey will help us create a best-in-class consumer healthcare business," said Vaziralli on Tuesday. “Over-the-counter consumer healthcare is a nascent but rapidly growing market in India, and one we are very excited about," said Raj Dugar, senior managing director, Fidelity Growth Partners India. He added that this is a unique opportunity for us to partner with Cipla, a company that has long been associated with changing the paradigm of care to build a robust platform that delivers differentiated, high quality products for the Indian consumer. Using our combined knowledge and resources, we intend to provide OTC products that will bring significant benefits to the consumer. The Indian Consumer Healthcare market is currently a $4 billion market and is growing at about 15 per cent annually. It is expected to be a $10 billion market by 2020, according to industry estimate. Cipla’s CHC division recently launched its first product Nicotex, a gum which helps smokers quit the habit. This product is a switch from our prescription business and has had a very successful launch in the South of the country. Cipla managing director and global chief executive Subhanu Saxena said, "It is great to see Cipla in consumer healthcare. It has been my aspiration since joining the Company that every person in India should have access to Cipla’s healthcare products that are available at a price affordable to them." The consumer healthcare business will help us to achieve this vision faster. This partnership with Fidelity clearly reinforces trust in our vision of having a word-class consumer healthcare business,” he added. The private investment from Fidelity in Cipla's consumer healthcare business is subject to execution of definitive agreements and regulatory approvals and it will come through Fidelity's Mauritian investment arm FIL Capital Investments (Mauritius) II Limited or its affiliates.
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The government’s efforts to boost the domestic medical devices sector do not have a serious ring about themBy Joe C. MathewThe setting could not have been more perfect. At the annual World Economic Forum (WEF) summit in Davos in January this year, a small Indian firm, Hindustan Syringes & Medical Devices (HMD), found itself centre stage after Switzerland-based NGO, Global Alliance for Vaccine and Immunization (GAVI), announced a partnership with it for its injection safety campaign.What made it more momentous for HMD was the fact that announcement came in the presence of the biggest ever Indian contingent at WEF, where the Narendra Modi government’s branding exercise for its flagship “Make in India” initiative was also in full swing. Incidentally, the medical devices sector, the industry which HMD represents, was among the ones that were being showcased under the Make in India initiative.Unlike its more accomplished cousins in the healthcare sector — the domestic generic drug and vaccine manufacturing companies — Indian medical equipment makers are hardly among the headlines. Hence, the partnership served to put the spotlight on the domestic medical device makers in general and HMD, the private firm that specialises in the manufacture of auto disposable syringes in particular. Though the partnership was worth only $1.5 million, it amounted to a great deal more in terms of its symbolic importance.A Dream And A ComplusionMaking India a global manufacturing hub for medical devices is the government’s dream. It is also a domestic compulsion as self-sufficiency in 14,000 different product types ranging from wound closure pads to stents to in vitro diagnostic machines is needed to provide affordable healthcare to the country’s 1.3 billion citizens. The significance of the task at hand becomes evident when one considers the fact that while India is near self-sufficient in the production of drugs and vaccines, it is heavily dependent on imports for supply of medical devices. If the domestic industry is to be believed, the government policy itself is skewed in favour of medical devices imports and thus works against the professed ‘Make in India’ slogan.Only 30 per cent of the Rs 70,000-crore worth domestic medical devices market is served by local manufacturers who mostly operate in the low-price, high-volume medical devices segments. Thus, while domestic manufacturers account for 67.3 per cent of sales in the disposable and consumables segment — the lowest in the medical device value chain, imports make up 87.4 per cent of the sales of medical electronics and hospital equipment product market, which constitute the high-end segment.That was precisely the reason why medical devices, as a standalone sector, were among the first to be considered a priority manufacturing sector during the formative stages of the Make in India mission. The quantum of work that needs to be done to promote the sector was also clear when the government asked at least half a dozen departments to suggest ways to make it a viable industry. As more and more sectors got added in the mission — currently, 25 sectors are covered — medical devices ceased to exist as a separate sector, though it continues to be one of the key elements within several broader sectors such as pharmaceuticals, electrical machinery and electronic systems. The very fact that medical devices can be part of several sectors also indicates their unique positioning and explains why the government had to ask multiple departments to fast-track measures that can help the growth of indigenous medical device sector.Policy PushIncluding medical devices in the Make in India initiative was just the first step. Almost a month before the WEF meeting, i.e., in December 2014, the government came up with a notification allowing 100 per cent foreign direct investment (FDI) in medical devices sector through automatic route. The significance of the development did not lie in 100 per cent FDI (it was the case earlier also, though government approved it on a case-to-case basis), but in taking out medical devices from the broader pharmaceuticals industry and giving it a separate identity. By this, the government wanted to convey that it wanted to treat the medical devices sector as a separate entity from the pharmaceutical sector as far as FDI was concerned. The domestic medical device sector received further boost with the formation of a task force under the Department of Electronics and Information Technology (DEITY) to promote the medical electronics ecosystem — an area where import dependency is highest — in the country. Based on its recommendations, several measures, including some that are common to other industries that DEITY caters to, were initiated. For instance, medical devices companies today are entitled to a subsidy of 25 per cent on capital expenditure (20 per cent in SEZs), with full reimbursement of excise / countervailing duties paid on capital equipment. More incentives have been instituted in the form of grant-in-aid, scholarships, reimbursement, skill development, etc., to promote investment, research and human resource development in the sector.However, the two most important initiatives for the sector came from the ministry of health and the ministry of chemicals and fertilisers. In the case of the former, a Bill amending the Drugs and Cosmetics Act to accord a distinct status to medical devices, with a separate set of rules and regulations for quality control, is awaiting Parliamentary clearance. In the latter’s case, recommendations of a task force set up under the pharmaceuticals department to prepare a draft “national medical device” policy for giving a long-term growth push to the medical device sector are under consideration.Hansraj Gangaram Ahir, minister of state for chemicals and fertilizers says, “The task force has recommended the setting up of manufacturing hubs in the private-public partnership mode, strengthening the ‘Made in India’ marking specific to medical devices in line with international standards like CE….”How fruitful will these measures be? The reactions from the global multinational corporations (MNCs) which control 87.4 per cent of the medical electronics, hospital equipment and surgical instruments market in the country through imports are mixed.MNC ConcernsJust over a year ago, Advanced Medical Technology Association (Advamed), a representative group of global medical device manufacturers, surveyed 1,300 respondents across 17 states to understand how extensively Indians used medical devices. According to its findings, 72 per cent of the respondents said at least one person in their families had used a medical device, but 89 per cent of them did not know the significance and use of such devices. Similarly, 80 per cent considered “brand” to be the indicator of quality, while for 96 per cent “doctor” was their most trusted advisor as far as medical devices were concerned. The survey was meant to generate sufficient data to engage with the government. The medical device MNCs wanted a supportive regulatory environment, increase in overall health spending, greater insurance coverage and incentives for investment and research. Going by the recent government initiatives, all of these suggestions seem to have been taken on board.“The industry is encouraged that the government has taken cognizance of the fact that issues related to the pharmaceuticals sector are different from that of medical devices. The proposals for medical device parks, autonomous regulatory authority, 100 per cent FDI, incentives for R&D, etc., will all foster the development of the industry. In fact, India represents a compelling opportunity for make in India and make for India”, says Sanjay Banerjee, chairperson, India Working Group, Advamed.At the same time, the multinational firms are worried about the government move to bring medical devices under the purview of price control. “Medical devices are a diverse group of products that have short life cycles. More so, India’s distinctive disease profile makes innovation in medical technology significantly more crucial. Given the significant differences between pharmaceuticals and medical devices, regulatory and pricing systems for medical devices need to be conceived differently from that of drugs,” Banerjee says. According to him, the government should ensure that the price control regime prevalent in pharmaceuticals is not transferred to the fledgling medical devices sector.The overemphasis on Make in India has the MNCs worried as they say that domestic manufacturing of high-value, technology intensive medical devices may not always make commercial sense unless the market size and pricing structures justify it. “However, the entire policy objective needs to focus on raising awareness about and enhancing access to safe, effective and affordable medical technology products for patients instead of just focusing on manufacturing in India,” Banerjee says, adding that the primary focus of the government should be to make medical devices accessible and affordable to Indian citizens.Historically, the medical device sector has not been a lucrative area for foreign direct investments (FDI). It is only in the last five years that things have started to look up. The cumulative size of foreign investments into the country in the last 15 years (April 2000–April 2015) has been $954.53 million. The size of FDI in FY 2014-15 alone was $120.96 million. Looking Beyond FDI“Not a single investment has come after the announcement of the FDI policy,” says G.S.K. Velu, managing director, Trivitron Healthcare, a leading domestic medical device manufacturing company. “We should not rely too much on foreign investments to push the domestic medical device sector,” he says. Velu has managed to attract foreign investments in Trivitron through six joint ventures and partnerships that his company has with global players in medical technology. According to him, Indian entrepreneurs should drive the growth of the domestic medical device sector. “That has always been the case, be it in biotechnology or in information technology. Industry growth was led by domestic entrepreneurs,” he says, adding that price regulation should not be seen a regressive step.“There are reasons to believe that price regulation, at least in some segments, is a good step. But that’s not all. The government has taken only baby steps. There is no move to motivate Indian entrepreneurs in this segment,” says Velu. Incidentally, two third of Trivitron’s profits come from exports. Velu says that he is surviving because of export revenues as manufacturing is not incentivised in the country. He finds the inverse-duty structure to be a major culprit.Trivitron’s growth is an exception than a norm in the domestic medical device industry as there are only two companies (including Trivitron) with annual sales in excess of Rs 500 crore. Majority of the approximately 800 domestic medical device manufacturers are small and medium-scale companies. Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AIMED), the body that represents the domestic players, says the government can create a conducive ecosystem for the growth of the indigenous medical device sector if it takes care of its immediate concerns. Withdrawal of all concessional basic duties is top of their list. Preference to local manufacturers in government purchases, institution of a regulatory framework around self-certification, and creation of a separate department for medical devices are some of the other suggestions put forth by AIMED.“The government should create an autonomous Medical Devices Authority to regulate and facilitate manufacturers to self-certify and also audit units post self-certification. A new ministry should house the department of pharmaceuticals and the department of medical devices,” says Nath, who is also the joint MD of Hindustan Syringes.In the past one year, the government has given a lot of hope to the industry through task force reports and draft regulations. But nothing has changed on the ground.In February, the National Pharmaceutical Pricing Authority (NPPA) sent notices to manufacturers, importers and marketers of syringes, needles, stents, catheters, intra-ocular lenses, bone cements, orthopaedic implants, internal prosthetic implants, etc. for failing to furnish their price list to NPPA.This move continues to be questioned by the medical device makers on the premise that devices are not drugs and the market dynamics are different. For now, the health ministry has chosen to ignore them as it believes its task is limited to protecting consumer health. NPPA continues to monitor and fix the prices of 14 medical devices as they are, as per its definition, categorised as drugs. The finance ministry, too, has refused to be drawn into the debate citing technical incompetence in scientific matters.Clarity on all these issues are essential for promoting local manufacturing of medical devices. Until then, Make in India graph will remain just a straight line on the country’s economic health monitor. joe@businessworld.in, @joecmathew(This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Mark Britnell, chairman and partner, Global Health Practice, KPMG, talks to BW’s Joe C. Mathew about adoption of global healthcare technologies that can suit India’s needsOn universal healthcarePrime Minister Narendra Modi’s intention to provide healthcare to all is a great move. India spends 4 per cent of its GDP on healthcare, which is the lowest among BRICS nations. And of that 4 per cent, only 1 per cent comes from the government. So, India should double its commitment on public expenditure.Economics & good healthProductive lives have a positive impact on the economic performance. In a study for the South African government, KPMG demonstrated that an increase in life expectancy by one year could raise GDP by 4 per cent over a number of years. So, if you could create a virtuous circle of health, you could create a virtuous circle of wealth.India as FDI destinationIn terms of investment — domestic as well as inward foreign direct flow of funds — the opportunities are enormous. With the right leadership and governance, I believe India is set for an explosion in its healthcare capability. The Japanese are keen to partner with India to develop a healthcare system here. The British are willing to help. The Singaporians and the Malaysians have got some big hospital groups that are looking to invest here. The Americans, Australians and Brits will be interested in the field of medical education here.Strengths of Indian healthcareThere are three things India’s top-end healthcare companies do that the rest of the world can learn from. The first is the mastery over the clinical process. They have standardised the clinical process, made it transparent, and aligned IT systems with the systems on the ground. Second is the supply chain, both clinically as well as non-clinically — they have been assertive in adopting the best practices in supply chain and management. Third, because of the clarity they have in the pathways, technology and supply chain management, they have been able to be more imaginative in the way they deploy their staff.On smart healthcare solutionsThere are three ways in which healthcare can revolutionalise the concept of smart cities. First, via wearable technology. Two, the penetration of tele-health and tele-care services. Third, use of smartphone for consultations. But healthcare, in relation to smart cities, is still a concept. The good thing is that the three areas I talked about already exist.(This story was published in BW | Businessworld Issue Dated 10-08-2015)
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As predicted by analysts and industry experts, Sun Pharma will cut production units, divest non-strategic businesses of Ranbaxy to increase cost savings from the merger deal , says C H UnnikrishnanDrug maker Sun Pharmaceutical Industries Ltd, which is in the process of operational integration of merged entity Ranbaxy into the combined business, says that its profits and revenue will continue to be impacted in the whole financial year of 2015-16 due to the integration costs. The company, as predicted by the industry analysts and experts, is now planning to rationalise manufacturing units and divest some of the non-strategic businesses of Ranbaxy to increase cost savings from the $4 billion merger deal that it signed in 2014. The industry analysts and consultants had predicted job cuts in production and sales soon after the deal as the company would initiate manufacturing rationalisation and also by optimising marketing and sales network, although Sun Pharma had strongly denied this earlier. "As a part of the integration process, the company expects to incur certain integration charges in order to generate long-term synergies from this merger. Also, as a part of the integration process, the company may decide to discontinue certain non-strategic businesses," Sun Pharma said on Monday. "Our target for the synergy benefits from the Ranbaxy acquisition has increased by 15-20 per cent as compared to our original target of $250 million by financial year 2018. This will be achieved by focusing on overall profitability improvement driven by revenue and procurement synergies, manufacturing rationalization and various additional cost-management measures," said the senior management of Sun Pharma in a Monday late evening conference call. Soon after Sun Pharma's acquisition, Ranbaxy witnessed an exodus of its US leadership team. It also saw the exit of several more senior executives in its India leadership leaving the company after the formal merger with Sun Pharma in 2015. Sun Pharma acquired the troubled Ranbaxy through an all stock merger deal in 2014. Ranabxy, the then largest drug maker in India by sales, had lost half of its $2 billion revenue contributed by the US market due to serious manufacturing compliance issues at four of its key export units in India. The industry analysts had recently said that the company might discontinue some of these manufacturing units instead of investing further in these units for making it compliant with the US quality norms. While the company says that it will continue the remedial measures at the affected units, it will focus and expedite the process for one of these units. "The remedial action at the Mohali, Dewas, Poanta Sahib and Toansa facilities (the US export units of Ranbaxy in India those were banned from imports by the US Food and Drug Administration (FDA) for violation good manufacturing practices) is on track. We are working towards the fulfilment of the requirements of the US consent decree and will try to expedite the resolution for at least one of these facilities," said Sun Pharma promoter and managing director Dilip Shangvi. Meanwhile, a couple of Sun Pharma's own manufacturing units in India which cater to the US market are also under US FDA scrutiny over the manufacturing norms violations. "A key priority for us is to ensure continued current good manufacturing practice compliance by continuously enhancing systems, processes and human capabilities to meet global regulatory standards at all our manufacturing facilities. As a part of this process and in order to address the deviations at its Halol facility, the company has undertaken various remedial measures. These remedial measures have resulted in supply constraints for some of the products. We expect this situation to continue for some more time till all the remedial steps at Halol are completed," Sun Pharma said. However, these measures are likely to adversely impact the overall revenues and profits of the company for financial year 2016. "Consolidated revenues will remain flat or show a decline over the previous year and the consolidated profits may also be adversely impacted due to certain expenses/charges arising out of integration as well as remedial actions, although the above initiatives will help the company revert to a more sustainable growth trajectory going forward," the company said.
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Decrease in sales of price controlled drugs and growth in non-controlled drug launches are unfair in nature and should be prevented, writes CH UnnikrishnanDrug market researcher IMS Health’s recent study on the impact of drug price control on access to medicines in India shows 7 per cent decline in consumption of price controlled drugs in the rural markets. It also shows the sales of medicines outside price control have gone up by 5 per cent since the implementation of the latest drug price control order (DPCO) in July 2013. It is a fact that the price reduction can’t alone ensure increased access to medicines in India where shortage of healthcare infrastructure and limited market reach of drug makers remains unresolved. C H UnnikrishnanBut, the new study’s conclusion that price control measures are ineffective and unsustainable on the basis of these market data is unfounded and is directed to a malicious intention of discouraging the government from such market intervention. Both these trends, decrease in sales of price controlled drugs and growth in non-controlled drug launches, are unfair in nature and should be prevented. Government should come forward to reinsure the real purpose of drug price control. The IMS study indicates that the sales of price controlled drugs have fallen and others have gone up because the drug companies are moving out of the price controlled portfolio and focusing more on non-price controlled brands. According to the IMS report, the small and medium companies who largely supply to the rural markets have found their business unviable in the price controlled category and were “forced out” from this segment and the sales in the non-controlled group increased as new launches in this category were high during this time. As a matter of fact, the drug price control order of 2013, which brought all the 348 drugs included in the National List Of Essential Medicines (NLEM) and their formulations under the ambit of the price control order, had very specifically put the condition that the drug companies should not withdraw their products from the market for at least five years without adequate reasons approved by the government. Also, there aren’t many new molecules (not included in NLEM) which invented and introduced in the market recently for the generic companies to increase their non-price controlled launches, especially in a patent protected market. Therefore, two key questions; How did these price controlled drugs started vanishing from the market? And, where did these new launches in the non-controlled category came from? Strangely, IMS Institute India, which conducted the study, tries to establish that price control is neither an effective nor sustainable strategy for improving access to medicines for Indian patients. The study, 'Assessing the Impact of Price Control Measures on Access to Medicines in India’, claims that it was based on both extensive quantitative data analysis of growth and volume trends and in-depth qualitative interviews with industry stakeholders and policy makers. The numbers shown in the report (if true) proves the veracity of the claim. But, it somehow fails to explain the conclusion that drug price control order is not effective and sustainable in a market where the providers are not very transparent on their cost and profitability. Prior to DPCO 2013, the prices of many drug formulations of same molecules in India varied from 10 per cent to 300 per cent. Although the industry argues that the investment on quality standards also vary from manufacturer to manufacturer, the fact remains that it cannot vary so much considering the standard cost of the generally mandated Good Manufacturing Practices (GMP) laid out by India’s regulator (under Schedule M) or the World Health Organisation (WHO). Nevertheless, the argument of the study sponsor—Organisation of Pharmaceutical Producers of India (OPPI) that the government intervention in pricing is irrelevant as it should be left to the market mechanism (competitive pricing) also fails to differentiate the healthcare market where consumer (patient) is not the decision maker. Lastly, the IMS study also says that the primary beneficiaries of the DPCO 2013 price controls have been high income patient populations, rather than the low-income targets. This can be largely linked to the poor market reach of drug makers in India, which has been the case even earlier. India, where drug prices are the lowest in the world thanks to predominant generic presence and a persistent price control regime, still claims only 30 per cent of its population having access to modern medicines due to poor distribution and limited infrastructure. Therefore, the focus should be targeted at expanding market reach and not at shelving price control orders.
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India has extended price caps to an additional 39 drugs ranging from commonly used diabetes treatments to antibiotics, in the government's latest effort to improve the affordability of medicines.Wide-ranging price cuts over the past year have hit several drugmakers in India and have been opposed by many in the industry, who say drug prices in the country are already among the lowest in the world. The new drugs join a price control list that covers more than 500 drugs.The latest move will include medicines made by foreign drugmakers such as Abbott Laboratories and GlaxoSmithKline Plc, as well as domestic firms such as Lupin Ltd, Cadila Healthcare Ltd and Ipca Ltd.The move comes after a parliamentary committee said in April that the scope of price control needed to be enlarged even further. In India, the majority of people live on less than $2 a day and health insurance is scarce.But a study conducted by healthcare research firm IMS and sponsored by the main business association of multinational drugmakers operating in India argues that price controls are not an effective strategy to improve healthcare access for Indian patients.Price caps benefit high-income patients rather than the low-income patients and put pressure on profit margins for small and mid-sized companies, said the study, which was released on Tuesday.(Reuters)
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