The Biden effect on India Pharma Inc
Stakeholders share their views and insights on the impact of a change of guard at the White House and outline India Pharma Inc's expectations from the Biden administration
We expect there to be an even stronger focus on generics and biosimilars
In line with the President elect’s campaign promise of lowering healthcare costs, we expect there to be an even stronger focus on generics and biosimilars to introduce material savings. Localising manufacturing in the US has also been a subject of focus, though with it would come an increase in cost compared with India-based production. However, we remain open to the discussion of localising manufacturing, should the new government offer relief on pricing or provide an indicative commitment on volumes. We would be well-positioned to meet this need from both a product portfolio and capability perspective.
– Vinita Gupta, CEO, Lupin
A dramatic change in immediate future on US domestic pharma policy is unlikely
Now that Joe Biden is taking over as the 46th President of US, it is important to analyse the impact of his proposed healthcare policy on Indian pharma industry because close to 40 per cent of generics valued at about $7.0 billion consumed in the US are imported from India. His campaign website promises to ‘build on the Affordable Care Act (ACA), by giving Americans more choice, reduce healthcare costs and making our healthcare less complex to navigate’.
Considering the fact that the US pharma and healthcare industry has made a generous donation of close to $6.0 million to Joe Biden`s presidential campaign, and the Senate is likely to be controlled by the Republicans, a dramatic change in immediate future on US domestic pharma policy is unlikely. He is likely to rein in high prices of prescription drugs for which there is no or little competition. Also, there are plans to reduce Medicare eligibility age from 65 years to 60 which translates into 20 million more patients. He has also indicated importing prescription drugs from Canada where drug prices are significantly lower.
There is also an issue of the Generalised System of Preference (GSP) which gives duty-free access to developing countries by developed countries for approximately 3500 products, many of them pharma. Hopefully, this exemption will continue. But, considering the fact that most US foreign policies are transactional, Biden is likely to review Indian price control on certain US-made devices like stents, knee replacement and other medical devices as well as India`s Intellectual Property Protection laws. The best strategy for the Indian pharma industry to benefit from the lucrative US market is to move up the value chain by focusing on biosimilars and complex generics and enter the emerging online pharmacy segment, now that the Amazons of the world have entered the fray, by supplying white label products.
– Dr Ajit Dangi, President & CEO, Danssen Consulting
The Indian manufacturers would expect that the US govt includes generics as a preferred tier
India has been playing a critical role in supplying safe, effective, high quality and more affordable drugs to the US patients. With Joe Biden’s win in the US presidential elections, the role for Indian pharma and healthcare companies will become more relevant considering there will an increased push for generic prescription drugs and access to affordable health insurance.
One of the factors that were emphasised on, during the campaign was about patients paying higher prices for prescription drugs. As a result of which, most patients are unable to afford branded medications pushing drug pricing.
The President’s proposal will focus on laws that allow Medicare to negotiate drug prices with manufacturers and install enforcement tools to limit prescription drug prices. He will also establish an independent panel to recommend prices post considering rates charged in other countries for new drugs that lack competition. In this context, Indian companies can be a crucial partner to achieve this goal and help lower prices due to increased competition. That said, in the year 2019, Indian pharma companies have secured 336 ANDA approvals out of total 837 approvals i.e. 40 per cent of the total approved applications at the USFDA to bring new generic drugs to the US market.
This is also true in the case of biosimilar drugs (another agenda on the President’s proposal), although it is clear from statements made by CMS, that these drugs represent a particular challenge due to their high prices. Hence, the Indian government will need to introduce policies that aid generic and biosimilar companies to contest anticompetitive practices.
Overall with a change of guard at the White House, the Indian pharma sector may see an increase in government spending. Besides, the fact that the newly elected President is in favour of pushing progressive policies towards better healthcare comes as welcome news.
The Indian manufacturers, however, would expect from the US govt that generics be included as a preferred tier in the ‘Medicare’ – the health insurance program and avoid MNCs filing frivolous lawsuits delaying the entry of generics in the Medicare program. This will give a boost to India’s exports and at the same time meet the promises made by President Joe Biden and Vice President Kamla Harris
– Shirish Ghoge, Ex-senior Director Government Affairs of Abbott and Ex-senior Director of Public Polic