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‘There is a definite need to support SME upgradation’

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Harish Jain, Secretary and Sunil Attavar, President, Karnataka Drugs & Pharmaceuticals Manufacturer’s Association

There is no doubt that since 2014, from the time when the present NDA government has come to power, there is a sense of urgency in most departments and lot of new initiatives have been taken or are underway. The number of interactions have increased. There is more focus on healthcare and on the pharma sector due to the many initiatives taken by the government and also because of the focus on pricing and other patient-centric issues. The pace of initiatives/reforms needs to be accelerated on war footing, otherwise, the country will miss the opportunities in the life sciences sector.

Make in India

Current status of the pharma industry is that India is the third largest in volume (20 per cent of the global volume) and the 13th largest in value (3 per cent by value). This  is quite an achievement, but it also shows that we are at the lower end of the value pyramid. We have, for far too long, been focussed on the generic market. With the aspirations and the life style of the population rising, this kind of growth, based on low cost manpower, is simply unsustainable, especially post 2017 when fewer products are coming off patent. We need to move up the value chain, which can come about only with innovation and high- end research requiring inter-disciplinary collaborations. The industry is looking at new government to provide necessary ecosystem and incentives. Adoption of new-age technologies like artificial intelligence, 3D printing,  advanced big data  analytics, robotics, IOT in climate chain control should be encouraged.

GST implementation

The industry welcomed GST with open arms. Being in the initial stage, there were some teething troubles. Although implementation has matured to a great extent but challenges still remain with frequent changes. It should be made easy in use for all to adapt. The government should take the following steps:

  • Lower GST rate at five per cent since drugs are an essential commodity. This is long overdue, specially for unbranded NLEM drugs which the government wants to promote for poor masses.
  • Reverse the inverted rate structure
  • Expedite disbursement of refunds, especially of those related to exports

Drug policy reforms

Large section of the home grown industry, especially the SME sector, feels throttled with the number of changes and the pace of increased expectations. There is a clear and welcome direction  to align India pharma with the best global practices. This is necessary not only to compete, but also to have the best quality products for Indian patients. But the balance between the cost of medicines  and sustainable  quality practices with investments in R&D remains a challenge. Moreover, there is a perception that the direction and more so, the pace, tilts in the favour of large companies and MNC’s. Reforms are overdue specially with respect to DPCO and NPPA. Price control implementation must shift to high price and high trade margin essential drugs, like oncology and medical devices. It does not make sense for the industry, as well as the regulators, to spend their time and energy to control products whose daily dosage cost is less than Rs 10. Price approvals need to be simplified for products defined as ‘New Drugs’ under DPCO. Faster price approvals is the need of the hour. A mechanism needs to be evolved wherein prices of certain essential drugs, for example, silver sulphadiazine cream, chlorpheniramine tablets are fixed to realistic levels to make it widely available and not push the Rxs to other more expensive products. The SME sector which formed the fabric of the pharma industry, which has been instrumental in keeping drug prices the lowest in the world and also making it available to every nook and corner, needs to be protected and helped to face the challenges, and should not be left behind in our endeavour to align to the world. Steep increase in fees, need for BA&BE studies for new product approvals, etc, do pose a challenge and the SME sector see these as barriers for growth. Proposed revision in Schedule-M will make the  situation much more challenging as investment in hardware and skill upgradation will be very high. There is a definite need to support the SME’s upgradation. The new regulation while necessary, poses a huge challenge and the government must ensure that these don’t stiffen the growth of the SME sector or prevent new entrepreneurs from looking at pharma. Ayushman Bharat is a great initiative and can be a game changer for the industry.  And focus on pharmacovigilance is a positive for patient safety.

Jan Aushadhi

Great initiative which has been scaled up by the present government. Basically a highly subsidised programme aiming to provide generic drugs to masses at low cost. Currently, even after more than a decade of launch, it is merely clocking a turnover of about  0.1 per cent of total domestic turnover with lot of budgetary support. Accessibility  is still a challenge as in a universe of eight lakh, 5000 stores are too little, procurement is still by tender basis which restricts the number of companies that participate. The scheme can be made more liberal with more localised purchase. Some of the challenges that remain and that need to be addressed.

  • Meeting the API challenge – Negative. We have not moved forward on this critical area. Our dependence on imports for API’s remains high. 2016 was the year of API but little progress was made.
  • We need to make some big ticket investment not only in college at  graduate level but also at the PG and higher levels.
  • Research in new drug development  is very negligible  and needs some serious government intervention with help of academia.
  • New Drugs and Cosmetic Act is pending since long. Current Act is of 1940 ad Rules 1945  with amendments being made too often

Some expectations 

  • Needs to increase health  to four per cent of the GDP
  • Insurance coverage must be made universal
  • API sector should be revived with revival of PSUs. The existing land back available with them can be leveraged to make them top notch companies meeting a large unmet need and also become centres of excellence for technology in drug development and production
  • The government must have an innovation fund of at least Rs 50000 crores in five years  with centres of excellence for development of new drugs opened at all NIPER’s and other colleges
  • All PHCs need to be upgraded to world class wellness centres
  • The SME sector needs to be supported to upgrade to global requirements
  • Jan Aushodi to be decentralised to allow wider participation
  • GST to be made simple in application so that it is adopted by all

Ratings for schemes on a scale of 10

  • Make in India –    8
  • GST – 9 on 10 on Intent  6 on 10 on Implementation
  • Jan Aushadhi –    7
  • Ayushman Bharat –    8

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