Majority in the pharma manufacturing sector is opposing the recommendations of the Prime Minister’s Task Force report on drug pricing, especially move to bring all essential drugs under price control and de-branding, and have started lobbying to ensure key recommendations are not accepted by the government, it is learnt.
Leading industry associations like the Indian Drug Manufacturers Association (IDMA), Organisation of Pharmaceutical Producers of India (OPPI) and the Indian Pharmaceutical Alliance (IPA) are in the process of informing key decision makers to be careful while ‘blindly accepting the recommendations for political gains,’ informed sources. Further, they have expressed their displeasure in not considering their recommendations and suggestions on drug pricing.
Senior industry sources termed the report as ‘impractical except for a few ideas’ and incomplete without comprehensive suggestions for industry development at this crucial juncture. Recommendations of the report is good enough to sabotage the growth Indian pharmaceutical sector could attain in the last two decades, thanks to industry friendly policy initiatives and overall support. The report has not all considered the factors that contributed to the industry growth in last two decades and is suddenly trying to bring in a new regulatory and policy environment potential enough to sabotage the gains so far.
“Recommendations like de-branding will kill the industry. Do not experiment with new ideas. If this is going to be the environment, major domestic companies may think of relocating their manufacturing locations to overseas and import from there. If price control is extended then this industry has no future,” said a source citing many multinational companies operating in India have either reduced their manufacturing activities or have relocated their units from India in the recent past.
Another area the industry leaders are worried about is the possibility of bureaucrats controlling the prices. “We deal with these babus and mostly we deal with pains but have to live with it. When more drugs come under the controlled category, production of more essential drugs will come down as margins in controlled category are less for us. This is what is going to happen,” they warn and point out the NPPA has reduced prices of 900 odd formulations in the last six months.
Another argument supporting their cause is that 98 per cent of doctors in India are price conscious and prescribes only cheap brands and 70 per cent of the Indian population can currently ‘afford to buy drugs’. Prices of drugs sold in Pakistan are more than 5 times, Middle East and Malaysia six times and US 20 times, in comparison to the drug prices in India. Governments of Australia, Japan, Canada, UK, EU countries and Japan exercise control over drug prices and pharma companies are compensated with high prices to promote their domestic industries. Similarly, in countries like US, Brazil, Mexico etc. without any price control, industry is flourishing and 80 to 90 per cent of people are buying drugs without complaining about high prices, they noted.