Notwithstanding the progress made by the Indian pharma industry both within the international and domestic market, ironically the regulatory system in the country is still far from the desired world-class standards.
Central Drugs Authority
After a number of expert committees and voluminous reports, the ambitious Central Drugs Authority (CDA) of India is stuck in the process stage now. Government did set up Hathi Committee in 1975 and got the Pharmaceutical Research and Development Committee Report in 1999. Again Dr R A Mashelkar committee was formed, yet nothing could be translated into action, as the recommendations remained only on paper.
Finally, the government decided to overhaul the regulatory mechanism based on the recommendations by Dr Mashelkar panel, submitted in November 2003. And the Drugs and Cosmetics Amendment Bill 2007 was tabled in the House to set up a centralised agency as prevalent in most of other countries. But the bill is still under the consideration of the Parliamentary Standing Committee. While the government reiterates its commitment to set up the CDA, the unhappy industry is waging a battle to abort it, mounting clouds of apprehension on its future.
DCGI
Even now and under the proposed centralised regime, the office of the Drug Controller General of India (DCGI) has a major role to play, when it comes to regulatory and monitoring affairs. As in many other areas, the DCGI office is yet to catch up with the demanding compulsions of the booming industry. Files are moving slowly and the promised restructuring is yet to yield results, according to the industry.
Policy initiatives
The industry also felt itself at the crossroads with the government sitting indefinitely on crucial policy matters for the industry. Leading the pack of pending policies is National Pharmaceutical Policy 2006, two years behind the schedule already. The policy, in fact has been pending since 2002, after Pharmaceutical Policy 2002 was aborted. After many committees and reports, as usual with government procedures, a final draft was submitted in November 2006 and the Cabinet referred the draft policy to a seven-member Group of Ministers (GoM) on January 11, 2007. Though the GoM held three sittings so far, it couldn't make a final decision in this regard and the date for the next meeting is yet to be fixed.
So is the case with the eagerly awaited policy on data exclusivity, which is pending since 2004. No progress has been made after the Satwant Reddy panel hurriedly submitted the recommendations in May last year. Only one meeting has been held between the different departments during the last seven months. The department of Chemicals and Petrochemicals set up a high-level inter-ministerial consultative committee in February 2004 under the chairmanship of then secretary Satwant Reddy.
NPPA
Backed by the Chemical Ministry, especially Ram Vilas Paswan, the National Pharmaceutical Pricing Authority (NPPA) has been one of the few active players on the regulatory side during the recent times. Thanks to the determination of the chairman and his officers, despite having skeletal staff, the NPPA intervened effectively in the market to reign on the erring companies.
The agency has sent demand notices in 511 cases, including over 110 cases during the current year. The pending amount for recovery stood at Rs 1441.98 crore, while it could recover 104.30 crore so far, as out of the total cases, 87 per cent was held up in litigation. Though only 75 cases are pending in the court, it meant Rs 1333.85 crore in dispute and only Rs 81.14 crore could be drawn through court battles. Acting tough, it initiated process to attach properties of five defaulters to start with.
The number of demand notices has gone up from 40 in 2005-06 to 60 in 2006-07 and 110 till February 15, 2007, indicating the active intervention of the NPPA in the market in the recent times. But on the recovery side, it could just mop up Rs 4 crore so far this year from the defaulting companies. It is better, compared to below Rs 2 crore in the previous year.
So far, the agency has revised prices of 776 formulations in the scheduled category this year. Prices were increased for 60 packs and decreased for 256 packs. For the first time, as many as 447 formulations in scheduled drug category were brought under price control this year. The trend of decrease in prices of scheduled medicines continued at more than 80 per cent over the last three years. The percentage of first time price fixation has increased from 44 in 2004.05 to 58 this year.
In the scheduled drug category, it introduced pro-rata pricing to stop manufacturers from fleecing customers by changing strengths and packs of formulations slightly. In the decontrolled sector, the NPPA has brought about 10 per cent ceiling limit on the increase of prices per year, against the earlier 20 per cent limit and has been constantly monitoring it.
After the excise duty on pharmaceutical products was cut following the general budget this year, the NPPA was quick to swing into action by fixing the prices of scheduled formations accordingly. It asked the drug makers to cut the prices by 4.58 per cent in the MRP and issued guidelines to the decontrolled sector to imbibe the same margin in the prices. It has already started monitoring the prices.