Riding the wave
Across industries, hopes are riding high on the Modi government. And the pharmaceutical industry is no different. Sector specialists never tire of pointing out that pharma has done well inspite of and not because of government policies but this time there seems to be renewed efforts to attract the attention of Prime Minister Modi. Will we be left empty handed once again?
Policy pundits have put together detailed ‘must-do’ lists for the PM and his team for the first 100 days in office. Primarily because he has shown results in his home state. Gujarat has over 3000 pharma manufacturing units, with pharma giants like the Zydus Group, Cadila Pharma, Torrent Pharma, Claris Lifesciences, Intas Pharma to name but a few of the big ones. According to a 2008 KPMG Report, Gujarat accounted for nearly 42 per cent share of India’s pharma turnover, 22 per cent of drug exports and 20 per cent of chemicals output.
Pre election, we asked industry to put forth what should be on the next PM’s agenda (see Express Pharma issue dated April 16-30, 2014, http://pharma.financialexpress.com/pharma.financialexpress.com/latest-issue/3716-april-16-30-2014) and post election, in our issue dated June 16-30 we follow it up by asking industry to list down what should be Modi’s mantra for pharma. (See pages 26-33). Within these pages, is a detailed analysis of what’s wrong with the industry and how Modi and his band of ministers can go about putting it back on track.
The list reflects common concerns like the need to increase spend on healthcare, decrease taxes, increase transparency of regulations and streamline approval timelines. Ananth Kumar who took charge as Minister of Chemicals and Fertilizers, has reportedly said that he would approach pharma companies to reduce drug prices; a statement which was greeted with protests across all segments of the industry. On the other hand, there seems to be a commitment to introduce GST while addressing the concerns of states, which should get the thumbs up across sectors, not the least in pharma. (See story: A Green Light for GST; pages 38-41).
But there are also issues where certain segments of the industry are pitted against each other. One clear polarising point is intellectual property rights (IPRs). How will the government deal with pressure from the US, as well as pharma MNCs, which recently came to a flashpoint on the USTR 301 issue? (See story: http://pharma.financialexpress.com/editorial/3823-more-to-rules-than-the-carrot-and-stick-approach). While we do need to incentivise innovation, what is the best way to balance this with access to affordable, good quality medicines? Taking a populist stance only to back down later may prove costly in the long run.
There is no doubt that Gujarat benefited from the industry friendly policies put in place during Modi’s reign and corporates can’t be blamed for hoping that he does the same at the centre. And it seems to be already happening. Just 20 days into his term, the government has given the okay to raise the height of the Narmada Dam by 17 metres; a decision which was a political hot potato for the last eight years. Sure, the decision is controversial; with activists like Medha Patkar of the Narmada Bachao Andolan pointing out that the increase in dam height will mean more displacement of project affected people, besides that fact that big dams have raised questions across the world. But with this decision, the Modi government has proved that it is capable of biting the bullet and taking tough decisions.
Will the stance be sustained or will it subside? In the pharma space, we need a tough long term view on IPRs, drug pricing strategies, regulations for clinical trials. Funds need to be allocated to upgrade pharma MSME companies while ensuring that they toe the line on good manufacturing practices. PM Modi has chosen ministers with strong domain expertise as well as political savvy. Union Health Minister Dr Harsha Vardhan has proved his stripes both as a doctor as well as administrator as minister of state for Delhi in an earlier avatar. So also, the minister of state for Science and Technology and Earth sciences Dr Jitendra Singh is a Professor of Diabetes and Endocrinology. Both have had long successful political careers and will hopefully help form policies which are people as well as industry friendly. Let us hope that the hype turns into reality.