Policy shifts test pharma’s resilience

Important proposed policy changes reflect the government’s commitment to make medicines more affordable for patients, weed out unethical marketing practices across the pharma supply chain and over time, hopefully rebuild trust. However, while the sluggish pace of policy change remains a concern, how will these moves impact pharma companies in the long run?

Let’s consider the latest salvo on medicine prices. On October 17, the National Pharmaceutical Pricing Authority (NPPA) capped trade margins at 30 per cent for 137 nonscheduled anti-cancer medicines. This comes nearly eight years after a 2019 pilot exercise, which capped trade margins at 30 per cent for 42 non-scheduled anti-cancer medicines. According to government data, as part of the pilot, MRPs of 526 brands were reduced by up to 90 per cent (https://www.expresspharma.in/nppa-capstrade-margins-at-30-per-cent-for-137-anti-cancer-medicines/). While industry associations like IPA and OPPI have welcomed the move, both call for an assessment of the actual impact of this change on patient access and availability.

Other experts like Mayur Sirdesai, Co-Founding Partner, Somerset Indus Capital Partners, stress that affordability must be viewed across the entire cancer-care pathway, from screening and diagnosis to treatment.

In some cases, the delay in policy change has given industry time to clean up its act. On October 8, the Supreme Court directed the constitution of a threemember Committee to examine existing regulations on pharma marketing and their adequacy for curbing unethical practices. The Uniform Code for Pharmaceutical Marketing Practices (UCPMP), 2015, which was strengthened in 2024, could move from the current selfregulatory framework to a statutory regime. A final decision is still some time away, with the committee expected to submit its recommendations before the next hearing scheduled for January 2027.

Analysing the impact of this policy shift, Nandan Kulkarni and Shirsh Sawarna of Bernstein (India) point out that over the past 12-18 months, large Indian pharma companies have already been gearing up for implementation, by actively strengthening controls, documentation standards, training programmes and healthcare-professional engagement processes. If the regulatory framework ultimately moves toward a more formal statutory construct, they believe larger companies with established governance processes, stronger compliance infrastructure and ethical commercial practices are likely to be better positioned than smaller peers to navigate the transition.

While UCPMP governs manufacturers, the government is also plugging the loopholes across the pharma supply chain, by proposing to expand restrictions in advertisements of Schedule H, Schedule H1 and Schedule X drugs to retailers, wholesalers and distributors.

Again, like the trade margin caps on cancer medicines, this is good news for patients. The proposal is along the lines of the March 2026 advisory from CDSCO prohibiting direct and surrogate advertisements and promotional activities for Glucagon-like Peptide-1 (GLP-1) receptor agonists.

But as a recent analysis by Anushree Kataria, Tanya Kukade and Dr. Milind Antani of Nishith Desai Associates (NDA) points out, these proposed steps could increase the compliance burden for retailers, and could overlap with prior Central Government permissions already taken by manufacturers for the same prescription products.

The fact that non-compliance with the proposed advertising restriction may expose retailers, wholesalers and distributors to regulatory action, including suspension or cancellation of their sale and distribution licences, indicates the serious nature of the proposed draft amendment.

The NDA analysis also points out that the proposed amendment may cover promotional communications concerning Schedule H, Schedule H1 and Schedule X drugs disseminated through digital platforms like online pharmacies.

The November edition of Express Pharma does a status check on another evolving policy initiative, the Pharmaceutical Production Linked Incentive (PLI) scheme, and touches on an important issue: can the next phase incentivise pharma MSMEs to invest more to become globally competitive?

The grouse of pharma MSMEs has been that since its launch in February 2021, the bulk of PLI funds were bagged by big Indian pharma companies while pharma MSMEs, who actually need the funds to upgrade and move to the next level, continued to languish on the sidelines. In response to this feedback, PLI 2.0 was launched in 2024, with some tweaks to make it more accessible for pharma MSMEs. But as the story reveals, MSME leaders are pushing for different, broader metrics to evaluate the scheme’s success/impact.

As regulators seek to clean up the pharma sector focused on patient safety and affordability, industry will have to find new ways to be as sustainable as possible. The saga continues….