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India's unpredictable drug pricing regime will have severe impact on doing business in India: Bhavik Narsana
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Nandita Vijay, Bengaluru
September 26 , 2017
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The draft Pharmaceutical Policy, released recently by the Department of
Pharmaceuticals (DoP), covers several aspects affecting the industry.
However, the most important part is pricing. While this draft policy
released by the government provides an insight to government’s
intentions, one will have to wait and watch for the final policy and how
the policy will be implemented, said Bhavik Narsana, Partner, Khaitan
& Co.
Providing a roadmap ahead for Indian generic drugs,
Narsana said that there are several factors which have, in the past,
affected, and which will, in future, affect this segment of the
industry, both exports as well as the domestic business. These include
global regulatory authorities giving more importance to quality of
drugs. For instance, the US FDA action on Indian manufacturers, R&D
expenditure and development of new drugs including biologicals,
protection of intellectual property rights, expiry of large number of
patents and pricing of drugs, particularly branded versions.
India
has an unpredictable drug pricing regime and this has had, and will
have, a severe impact on doing business in India, Narsana told Pharmabiz
in an email.
While the government’s intentions of providing
affordable drugs to the Indian population cannot be questioned, the drug
authorities need to find a better way to achieve their objective. In
the interest of all stakeholders a clear roadmap for the industry is
required to enable the industry to plan their business appropriately, he
added.
Whilst the quality of drugs exported is generally good,
the government needs to enforce better quality of drugs for the domestic
market as well. The bio-availability and bio-equivalence studies is
proposed to be made mandatory for all drugs to be approved whether by
central or state government. This will ensure minimum quality of drugs,
however, it will also mean higher costs for pharmaceutical companies.
Some companies will be able to survive this new requirement, however,
the smaller companies may not be able to bear the additional costs, he
noted.
In the area of active pharmaceutical ingredients (APIs),
the government is looking to encourage manufacturing in India which is a
step in the right direction. The success of this will largely depend on
the actual implementation of the proposal and also the costs involved
in manufacturing the APIs in India as opposed to importing the same from
China, said Narsana.
On the marketing front, the government has
expressed its intention to crack down on the nexus between the
pharmaceutical companies and the doctors. Recently the Indian government
expressed its intention to make it mandatory for doctors to prescribe
generic name of the drugs. Further, the government also proposes to make
the marketing regulations mandatory for Indian pharmaceuticals
companies. Indian companies will need to gear up for this eventuality
and be prepared with alternate marketing strategies, he said.
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