Regulatory woes continue to plague the AYUSH sector in India and hamper its progress despite measures to revive the traditional forms of medicine. By Usha Sharma
Ayurveda or ayurvedic medicines, are one of the oldest forms of treatment which traces its origin to India. In ancient times, this form of medicine was largely practised by vaidyas, the equivalent of modern-day doctors. Other forms of traditional medicines such as unani, siddha and homeopathy too were commonly practised in the yesteryears.
However, over the years, traditional medicines lost out in popularity to the more modern forms of medicine and were sidelined until recently. Renewed focus on the traditional medicines came when the government of India realised that, if properly regulated, these forms of medicine could help in increasing access to health in the country. Hence, ayurveda, unani, siddha and homeopathy (AYUSH) is on the path of revival, though a lot of bottlenecks continue to hinder its progress. Dr Amit Agarwal, Vice President, Ayurvedic Drug Manufactures Association (ADMA) shares some insights on the semi-matured AYUSH industry and says, “According to the draft National Strategy for Management of Medicinal plant – an inter-sectoral approach, 2014, prepared by the Foundation for Revitalisation of Local Health Tradition (FRLHT) and funded by the Ministry of Environment, Forest and Climate Change (MoEFCC), the total AYUSH market is estimated to be Rs 15,000 crores in 2014-15.
Of this, only about Rs 1500 crores are perhaps exported. There are over 8000 manufacturers of licensed ayurvedic, siddha, unani, homeopathy and swarigpa medicines of which ayurvedic manufacturers constitute the majority. The export is mainly contributed by raw herbs, extracts, oils, oleo-resins and other forms of processed botanicals with only a small contribution coming from finished products. The lack of reliable figures is primarily because of the confusion that prevails in the Indian HS-Coding system.”
Explaining the situation further, Dr Nandini K Kumar, Former Deputy Director General Sr Grade (ICMR) says, “The Indian AYUSH market is quite large but what is exported as dietary supplements is much less compared to China.”
Making a comeback
The current government, led by Prime Minister Narendra Modi, has been putting a lot of efforts to revive the industry. One instance is the PM’s recent visit to China and Mongolia. He signed memorandums of understanding (MoUs) with these two countries to create awareness about ayurvedic medicines on a global platform.
According to media reports, the Union Cabinet chaired by the PM Modi, also gave its approval for extending the tenure of an MoU signed between India and the China State Administration of Traditional Chinese Medicine (SATCM) on cooperation in traditional medicine. The MoU is expected to immensely benefit both countries.
PM Modi has also given his approval for signing an MoU for cooperation in the field of traditional systems of medicine and homoeopathy between India and Mongolia.
These measures certainly indicate that the government is keen on promoting Indian-origin traditional/ alternate medicines in the global market. Yet, the recently released new Foreign Trade Policy 2015-2020 released by the Minister of Commerce and Industry, Nirmala Sitharaman seems to have overlooked this sector.
Agarwal informs, “The recent FTP has discontinued Vishesh Krishi and Gram Udyog Yojana (VKGUY) and has introduced a new scheme called Merchandise Exports from India Scheme (MEIS). In the present form, the new MEIS scheme supports only a few botanicals. Our association has recently brought this to the knowledge of the Ministry of AYUSH with a request to rectify this omission. This, we hope, will be fixed shortly and the exporters of botanical preparations would stand to gain some financial relief (close to five per cent of the export invoice value).”
The AYUSH industry is governed by different Acts like Drugs and Cosmetics Act, Weights and Measurement, Magic Remedies Act, regulated by different governing bodies. “In all, there are over 100 government bodies with which an AYUSH industry needs to interact,” informs Agarwal. Despite this, lack of their effectiveness has been a major obstacle in the progress of this sector.
Quality and credibility also remain grave issues in the traditional medicines industry. A major reason for it is the manner in which the bio-resources are procured.
Elaborating on this theme, Arun Kedia, Managing Director, VAV Life Sciences says, “Currently, the active ingredients or significant markers of the herb are not defined or controlled in the finished formulation and every manufacturer is free to choose the raw material quality and to interpret the preparations in his own wisdom. This means, the same formulation from different manufacturers can have widely differing concentrations of actives or sometimes a completely different proportion of ingredients to what was originally intended.”
He opines, “Currently, India follows a liberal good manufacturing practice (GMP) standard for ayurveda, siddha and unani (ASU) medicines compared to modern medicine. Far too many ASU preparations are made at facilities with a low level of hygiene and controls. While this change may reduce the number of smaller units making ASU medicines under questionable conditions, over a period of time it will significantly expand the market of ASU products to a global scale. Myopically, most existing producers of ASU resist this change, which severely restricts the overall growth of the market.”
Kedia further states, “One of the biggest factors holding back Indian systems of medicine and homoeopathy from becoming main stream medicine in India for most of the common diseases is lack of credibility. There is a strong need to bring Indian medicine systems to the same level of credibility as modern medicine to expand its reach in India and the global market.”
Thus, it is very clear that AYUSH is in desperate need of a standarised quality process to enable and ensure safe output.
However, meeting certain standards require a considerable amount of investment and small and mid-sized players do not have enough financial support. Kumar feels, “The problem is that such standards cannot be maintained by small and medium entrepreneurs (SMEs) due to financial constraints.” He further informs, “There was earlier a move by the Ministry of Chemicals and Fertilisers to create regional facilities for them to use for manufacturing standardised product with appropriate quality control.”
Dr Vijendra Prakash, Senior Manager, Domestic Regulatory Affairs, Himalaya Drug Company adds his views, “AYUSH manufacturers procure bio-sources from various traders and vendors after ensuring complete compliance including paying taxes. With the access sharing benefit, there will be an additional financial burden that manufacturers will have to accrue. In effect, it will be dual taxation. The process therefore needs to be simplified such that the communities benefit, environment is protected and conserved and the industry is also able to procure bio-sources at a competitive price.”
The Biodiversity Act aimed to do exactly that as an attempt to simplify matters.
According to the National Policy on Indian Systems of Medicine and Homoeopathy-2002, there are restrictions on extraction and procurement from the wild. Hence, the trade is secretive and exploitative, leading to unsustainable practices in the quest for profit. Even today, most medicinal plants used by the herbal industry are largely cultivated and sourced from the wild forests. In the absence of a scientific system for collecting and fostering regeneration of medicinal plants, several species have either been completely lost or become endangered. The industry constantly faces the problem of raw material supply and its quality. Hence, in a bid to set standards that are at par with international standards for home grown traditional medicines without disturbing the natural resources, India signed the Convention on Biological Diversity (CBD) which came into effect from December 29, 1993. Under the obligations to CBD, the President of India acceded to the Biological Diversity Act-2002 (Act no. 18 of 2003) on February 5, 2003.
Giving more details of the Act, Prakash informs, “Biodiversity Act aims to conserve biological diversity, promote sustainability, and support fair and equitable sharing of the benefits arising out of the use of biological resources and traditional knowledge, it was framed in 2002. AYUSH falls under the ambit of the Act because most of the resources used by AYUSH industries are from bio-sources.”
The Act, in general, targets all sorts of manufacturers using biological resources (BR) as raw materials. ASU formulations, herbal veterinary products, herbal extracts and related phyto-pharma sector are targeted by authorities like National Biodiversity Authority (NBA) and State Biodiversity Boards (SBBs).
Agarwal further explains, “The AYUSH manufacturers use biological resources as raw material which is governed by the Act. The Act covers research, foreign collaboration, IPR and exports of all bioresource based products.”
He points out, “The Act has a huge impact on AYUSH manufacturers. To begin with, the raw material procurement needs to happen with the consent of Biodiversity Management Committees (BMCs) which are yet to be formed by village panchayats in each Village and SBBs from whose jurisdiction the bio-resources are being obtained. The BMCs are empowered to levy access fees while the SBBs claim to be empowered to charge benefit sharing fees.”
As per the procedure laid down under the Act, the buyer /manufacturer is required to provide prior intimation. The format prescribed for this purpose (Form-I) was borrowed from central rules by all the state governments. This form is specially meant for those companies intending to bio-prospect. There have been instances where the fee payable along with this form is as high as Rs 10,000/- in some states. This system of charging high-amount of application fee was borrowed by the States concerned from the processes followed by NBA, whereas, under the law, there is no empowerment to SBBs to collect any royalty/ ABS/ access fee. Yet, many SBBs are pressurising companies to share their profits. This has stirred up a storm in the industry.
Agarwal elaborates, “The main issue is with the interpretations adopted by the regulatory bodies. It appears that the focus seems to have shifted from conservation/ sustainable utilisation/equitable benefit sharing to revenue collection for filling the National Biodiversity Fund/ State Biordiversity Fund/ Local Biodiversity Fund.”
“The Act requires prior permission of NBA, before patent applications can be processed, by the applicant under Form III. NBA is demanding additional benefit sharing fees over and above what is already paid for accessing the bioresource. This is accompanied with complicated ABS agreements which have several one sided clauses which leave the applicants vulnerable. All these “well meaning” measures have a long term impact on research happening in the AYUSH sector. There was very little research happening in this sector. Now the overall research will drastically declinewith these new regulations in place. Any sector which does not have ongoing research support is likely to suffer in the long run. Thus, it is important that the NBA/ SBBs are not allowed to make ‘revenue centric’ interpretations of the Act or the regulations published in the Gazette of India on 21 November, 2014,” opines Agarwal.
Hence, Agarwal feels, “If India chooses to take leadership in this sector (which is what has been said time and again for several decades) then India will need to match its actions (including regulations) with its words. There is no purpose in gloating about our rich biodiversity and traditional knowledge if at ground level, counterproductive regulations and extreme bureaucracy (license raj) is being implemented.”
Need for clarity
Commenting on need for clarity, Agarwal stresses, “Clarity is essential for assessing impact on exports. Though as of now the exports has been happening as before, however, it is anticipated that exports can be severely impacted when the SBBs start implementing the Act. This is largely because the NBA is trying to treat value added products like herb powders, essential oils, oleoresins, extracts, phytocompounds etc. as bioresources instead of value added products. It should be noted that the Act is applicable only to bioresources and not to value added products. If the oils, oleoresins, extracts, etc. are treated as bioresources then the buyers or the exporters will have to seek prior approval of NBA, through Form IV after payment of Rs 10,000/- per application as application processing fee, for every consignment of export. Such approvals from NBA will need minimum six months to one year or more.”
He further explains, “There is no clarity at SBB level as to what botanical substance is a bioresource and when does it become a value added product. The industries have been searching for answers since many years. AYUSH products are likely to become more expensive in the coming times due to a significant increase in our raw material prices (because of ABS).”
Thus, as is the case with a lot of our measures, despite good intentions, we seem to stuck on the execution or implementation as far as the Biodiversity Act is concerned. AYUSH industry is in need of a push from the government, however it’s struggling to understand the regulatory process laid down by the government. It is the need of the hour to bring more clarity to the regulatory process and streamline its implementation to propel the growth trajectory of AYUSH in India and overseas.