The pharma and biotech industries in the country are now a worried lot following the Drugs Control General of India (DCGI)'s circular to all state drugs control departments not to issue the licenses on brands and only approve the formulations in generic names. The industry feels that all efforts to invest into innovation and Intellectual Property (IP) will be futile.

The industry has categorically termed it as potentially a havoc- creating directive because of serious questions on approval time lines with manpower shortage at the regulator’s office.

Although the directive allows India to send out strong signals that affordable drugs would be the way forward, it is creating a scenario where generics and biosimilars are expected to thrive. But all this has come in at the cost of the innovation. The country is already seen by global pharma majors as a difficult place to invest in R&D primarily because of the unfavourable regulatory environment and lack of long term policies by the government compared to China which is more encouraging, the industry feels.

“Though the intentions maybe laudable the practical situation is very worrisome. This ruling is playing straight into the hands of large companies, many of them transnational, who would like to see their own role increase in the Indian pharmaceutical space,” said Ajay Bharadwaj, CEO, Anthem Biosciences.

According to Dr PM Murali, president, Association of Biotechnology Led Enterprises (ABLE), if generic and biosimilars research, manufacture and marketing is given all the support, it would in turn generate the lucrative revenues from contract manufacture orders from the western markets and Japan. But the big fear is on the innovation. We have to ensure that the micro climate of innovation, intellectual property and investments into this sector is not affected in our overzealous populists’ measures.”

India is known for its lowest drug prices globally. Cost of therapy is borne by the patient and the disposable incomes are low. The cost of pharmaceuticals has been kept in check due to innovation and resourcefulness of the industry. Besides, there are fixed dose combinations. Now this ruling is not practical for those medicines with multiple ingredients. It will be difficult to control labelling and quality issues if no brand names are allowed for multi ingredients formulations. There are also questions on labelling of multi vitamin, prophylactics and how doctors could prescribe, if no name is ascribed to the formulation, said Bharadwaj.

Companies that have invested in R&D, such as Anthem Biosciences, will suffer. The return on investment cannot be justified and in turn dis-incentivises innovation in the country. There would be no better drug delivery devices or novel drugs if brands cease to exist. In the end, the customer ends up paying more if no innovation is introduced. The power of prescription will move away from the doctor to the pharmacy. The doctor would find one drug indistinguishable from the other. Pharmacies would be able to switch prescriptions with impunity, based on best incentives, said the Anthem chief.

There is also a growing concern on drug price rise and its production costs. If the cost of production does not go up in India, we would be able to hold sway in contract manufacture. Otherwise the consequences of patronizing affordability will drive out manufacturing from India to more affordable countries and need to ensure that this does not happen, pointed out the ABLE chief.