With Narendra Modi becoming the prime minister of the country, the Indo-US trade relation has reached its peak, highest ever between the two nations.
Touted as a strategic player with action oriented plans, one of the biggest achievements that the new government has been able to do is convince the US counterparts to look to India with the promise of providing a more stable and tax-friendly investment climate for investors in India.
Reports states that the US government aspires to reach $500 billion in annual bilateral goods and services trade with India by 2024, which is more than five-fold increase from the $97 billion total in 2013. Interestingly, among other key sectors, pharma plays an important role in the whole bilateral trade relation. Especially since, India is one of the fastest-growing pharma markets in the world, having established itself as a global manufacturing and research hub. Moreover, a large raw material base and the availability of a skilled workforce gave the industry a definite competitive advantage, experts say
Globally, India ranks third in terms of volume of production and 14th largest by value and is also expected to move up to 11th place by 2017. India is also one of the major suppliers of high quality generic drugs to the world including the US. It also has the unique distinction of being the only country in the world to have highest number of US FDA approved manufacturing plants apart from the US itself.
According to Pharmaceutical Export Promotion Council (Pharmexcil) the Indian pharmaceutical industry is likely to touch US$ 100 billion by 2025. The council observes that the domestic pharma sector is witnessing strong growth due to higher penetration in tier-II and tier-III cities and greater focus on the largely untapped rural market.
Growing bilateral trade relations
Dr Appaji director general of Pharmexcil informed that the US is the prime importer of pharma products from India and accounts for nearly 25 per cent of Indian pharmaceutical exports, followed by the European Union and Africa at second and third positions respectively. The export of bulk drugs continue to grow to regulated markets and is supported by India’s existing foothold in semi-regulated market.
It is understood that the pharmaceutical exports from India grew at a rate of 1.2 per cent to reach US$ 14.84 billion in 2013-14. He said, “There is certainly positive feeling among the exporters since the new government has come into the power which is seemingly driving the market to a greater growth rate. Also all measures are timely taken by the commerce ministry to address the on going issues of the industry so that the trade relations are not affected because of it. We have been working very closely with the US officials to address the current regulatory issues to ease up the trade relation.”
It was in lines with this that the council recently had a fruitful interactive meeting with the US FDA on establishing a trust worthy, problem free trade relation for a mutually beneficial business relation.This meeting was aimed at clarifying and clearing any ambiguity on the Indian drug regulatory system and quality of pharma products.
The council had for the very first time organized an interactive meeting with not only the top regulatory officials and CEOs of the pharma companies but also major national associations from across the healthcare spectrum as well.
In a first of its kind move they had also organised tele-conference between the FDA officials and top regulatory chiefs of the Indian companies like Lupin, Dr Reddys, Aurbindo Pharma, Cipla, Emcure, J B Chemicals, MSN Labs, Force India, Sun Pharma. S M Mudda, executive director of Micro Labs made a detailed presentation to the FDA officials on the Indian pharma industry and the issues relating to the US that Indian exporters are facing.
Concerns over regulatory developments
All said and done, there is a growing tension with the US over intellectual property rights related issues, an issue many experts feel is unlikely to be resolved anytime soon. During their recent meeting the Obama administration and some members of congress had expressed concerns about recent legal and regulatory developments in India’s patent regime.
In 2005, India amended its patent laws to comply with the TRIPS agreement, reintroducing product patents for pharmaceuticals, food, and chemicals. However, since 2012, India has denied or revoked patents for certain foreign drugs because they did not meet its patentability standards.
An April 2013 Indian Supreme Court decision confirmed that, under India’s Patent Law, pharmaceuticals and certain other technologies, must meet India’s requirement of ‘enhanced efficiency’ to be patentable. This requirement protects against companies making minor modifications of their patented products to extend the life of their patents.
However, contrary to this, in the interest of the patients the Indian government had issued compulsory licenses for pharmaceuticals and other products. While, India’s national manufacturing policy promoted compulsory licensing of patented products to encourage clean energy technology transfer.
A highly placed source from the industry informed that there is also a growing sense of un ease and confusion within the industry over the stand the new government will take on this matter. In fact stake holders feel that the PM should come clean on it so that it will instill more confidence within the industry and help pave way in getting better clarity on this issue.
It is understood that the council has already sent a detailed representation to the visiting team of high level US FDA officials on the Indian perspective and ongoing issues faced by the Indian pharma cos.