Suresh Kare, the chairman of Indoco Remedies Ltd has been elected as the new president of Indian Drug Manufacturers' Association (IDMA) last December. Kare has been the vice president of IDMA and also the head of its Regulatory Affairs committee. With the beginning of his term as the president of this national body of pharmaceutical companies, a number of issues have cropped up as a result of government's policy initiatives. These policies are threatening the very survival of medium and small-scale pharma companies. Kare has a clear understanding on these issues and has strong views as to how to face them. In an interview with Kavita Tate of Pharmabiz, Kare speaks them in detail. Excerpts:
You have taken over as the President of IDMA in last December when Indian pharmaceutical industry is just entering into new patent era. What do you think are the major challenges for the Indian sector of pharmaceutical industry under the new patent regime?
The new patent law marks the end of protected era and signals the integration of India into global pharmaceutical market. India's dependence on world market is 33%. In present situation pharma industry must adapt itself to newly amended Patent Act. About 13 to 14% of the products in the market are under patent. Not many products would come into market as the new amendment seeks to make copying of post-1995 patented drugs illegal. But, the impact of new regulations will not deter the Indian pharma majors as they are already doing good business in the countries where these patent laws are strictly in force. This patent has given us a chance to try new methods of drug delivery and different combinations of molecules.
IDMA is of view that the new patents law has some serious deficiencies and requires some urgent corrections. With the present provisions, MNCs will be in a better position than the domestic players and will enjoy undue advantage. The present policy will adversely affect the Indian consumers as well as domestic industry. The Royalty rates under compulsory licensing should be fixed at 4 per cent. Further, under the present Patents Law Compulsory Licence (CL) procedure U/S 87 is very lengthy and complicated. It is totally in favour of the Patent holder ie. MNCs.
With the product patent regime in place what will happen to the formulations of molecules under patent currently being marketed in the country?
Formulations made till 31st December can be manufactured and marketed though, they are under patent.
What kind of structural change you envisage for the Indian pharmaceutical industry, as the MNCs are likely to play a dominant role now?
Future of Indian pharmaceutical industry is bright. What is important is to make drugs available at affordable prices. We have the cheapest prices and will find a novel base. Also, reverse engineering is possible without infringing the patent. Knowledge that we have in abundance has to be utilized, as that is the big resource of growth.
There are fears expressed by large sections of consumer groups in India about a possible flare up in prices of essential drugs now. What's your comment on this?
Prices of only those drugs would go up that are patented newly and introduced for the first time in the Indian market.
Is there a provision under the current drug price control system to check the prices of patented drugs? If not what suggestion you have on this matter?
There is no such provision to check the prices of patented drugs. The government is contemplating to evolve a procedure to be followed to check prices of patented products and we will support this move.
What is the status of Pharmaceutical Policy 2002? Whether the provisions in the policy draft are going to give a boost to pharmaceutical industry at this critical juncture?
The new policy itself as we understand may not be able to provide the necessary boost to the Industry. Currently 74 drugs are under price control. We understand that new Drug Policy would be having only 30 items. This is a step in the right direction.
DPCO is the backbone of pharmaceutical policy and that is stuck in Supreme Court. But, neither the government nor the companies want the judicial interventions.
Industry associations and planning commission are discussing this issue with the government and it has to come out with some alternative. What we suggest is to increase CCPC norms by 50% and the mark up by 50% i.e. from 100% to 150% only then price controlled drugs would be affordable without compromising on the quality. Competition has been bringing down the prices, which is very clear from ORG IMS report. We would want the government to shift from price control to price monitoring.
IDMA has been opposing the introduction of levying central excise on MRP of medicines from January this year. Why did you object to this step and why are you silent now?
Excise on MRP from January 2005 has hit the small-scale drug units badly. Because of this change companies want to shift their manufacturing base to excise free zones. We have suggested that the excise duty to be reduced from 16.32% to 8.16%. This will deter many companies from migrating to excise free zones.
The final deadline for the pharmaceutical industry to comply with Schedule M is June 30. A large number of SSIs have no intention of adopting these norms. Do you think the government should be tough on this matter and force non complying units to close down?
IDMA has never compromised on quality. Quality measures should be implemented. Our pharma industry is highly sophisticated and we match the international standards. But, government should give time to SSIs, especially in areas where heavy investment is required. Areas where heavy costs/investments are not involved should be followed forthwith.
There are reports that Indian pharmaceuticals are not of reliable quality in the international market as Indian pharmaceutical industry is not fully compliant with GMP. What's your comment on this?
We have international plants and products are of reliable quality. With very large size of the market and population, the industry has very good future. The per capita spending on medicine in Japan is US$ 425 and in US it is $250 whereas the Indian per capita spending is only US$ 3. This shows that there is strong demand potential and our industry is well set to grab these opportunities despite competition. The pharma players will boost their earnings through contract research and contract manufacturing. Further, with the strong scientific base and cost competitiveness, the income through clinical trials will see significant rise in near future. For meeting this challenge industry must adopt stringent quality norms. I am happy to say that many progressive Indian companies have world-class facilities approved by US FDA, MHRA, MCC, TGA etc.