Aims at providing a longer term stable policy environment
To overcome the challenges like Declining CAGR; Non-adherence to quality standards and norms; Growing competition from other countries; Dependence on imports for the key starting materials as also of the APIs; Lack of R&D and discovery of new molecules, a
With the aim to boost domestic manufacturing of drugs, levy cap on trade margins, crackdown on unfair marketing practices and limit 'loan licensing' by pharma companies, the Department of Pharmaceuticals (DoP), Ministry of Chemicals and Fertilizers, government of India has come up with a 18 page Draft Pharmaceutical Policy, 2017 on August 17.
The new Draft Pharmaceutical Policy, 2017 addresses a range of issues including indigenous production of active pharmaceutical ingredient (API), quality control and regulatory approval, manufacturing arrangements, foreign direct investment, innovation and R&D and intellectual property. A major portion of the draft is devoted to pricing and makes various recommendations for the re-structuring of the National Pharmaceuticals Pricing Authority (NPPA) and changes to the Drug Price Control Orders (DPCO) says All India Drug Action Network (AIDAN), an independent network of several non-government organizations working to increase access and improve the rational use of essential medicines.
Welcoming the efforts of Department of Pharmaceuticals, Indian Pharmaceutical Alliance (IPA) compliments secretary, DoP for initiating work on a comprehensive Pharmaceutical Policy. Reacting to the draft policy DG Shah, Secretary General, IPA said “We welcome the efforts of DoP to incorporate in one document various elements from the 1978 Policy as modified in 1986 and 1994 and focus on some new issues.”
Commenting on the draft policy related to manufacturing and quality, IPA noted that the draft makes several observations about the current state of quality and the Good Manufacturing Practices (GMP). These observations need to be moderated as, if read out of context, they could damage the national industry's reputation in the world as provider of quality medicines at affordable prices. These observations can also compromise the country's aspirations to be recognized as Stringent Regulatory Authority (SRA) by the World Health Organisation (WHO). These observations also cast a shadow on some excellent work done in a short time by the drug regulatory authority and the health ministry to strengthen the regulatory function and its working.
IPA pointed that the draft reiterates some proposals from the old documents. Many of them have not been implemented for more than two decades. It would
Unless all concerned are convinced of its long term benefit to the consumer and are agreeable to patients paying more today for better tomorrow, this could remain just a thought. It also observed that the outcomes of these policy initiatives will be neither in the interest of the patients nor in the interest of the industry as the industry has been facing many other challenges.
- DG Shah, Secretary General, Indian Pharmaceutical Alliance (IPA)
be useful to examine and evaluate their utility and relevance to the outcomes. The draft also proposes some new initiatives. It is pertinent to have a narrative on the objectives of these new initiatives. They need to be examined with appropriate data to assess their impact on the outcomes. In the current context of improving industry's competitiveness and creating employment, it is all the more critical that these initiatives are also evaluated for their impact on these two parameters.
The draft recommends certain actions aimed at improving the quality and the GMP. These include mandatory bioavailability (BA) and bio-equivalence (BE) studies by all manufacturers and suggest selfcertification as solution for large number of products currently marketed without BA/BE studies. It also recommends annual inspection of manufacturing facilities with option for self-certification. These solutions grossly undermine the importance of the quality.
Ensuring “world class quality of drugs” require more quality parameters than mere bio equivalence with the innovator product. The world class quality also needs the stability data, in-vitro dissolution, impurity profile and GMP compliance. These being technical matters, they are best left to the drug regulatory authority and the appropriate technical committees and bodies.
Making point on price and availability of the drugs, IPA noted that the draft makes suggestions that alters the basic tenets and the structure of the National Pharmaceutical Pricing Policy (NPPP), 2012 and modifies the Drugs (Prices Control) Order (DPCO), 2013. It would be essential that the draft provides the rationale and objective of these changes. The changes include: conferring absolute powers to the Department of Pharmaceuticals for vetting National List of Essential Medicines (NLEM) and deciding the drugs that should be excluded from price control; bringing all strengths and dosages of specified drugs under price control; doing away with the "Retail Price" and having only the "Ceiling Price" for non-scheduled products, thereby expanding the span of control; considering manufacturers' onetime bonus and promotional offers to trade in price fixation; fixing margin for the wholesalers; etc.
The draft also proposes to strengthen the NPPA by induction of representatives of civil society, doctors, pharmacists, industry and the government in the advisory board. In addition, it seeks to convert the NPPA into a multi-member body, which has to work by consensus. IPA apprehends that both these measures will lead to further delays and complicate the functioning of the NPPA, instead of simplifying its working.
The IPA recognizes the need to make medicines affordable and supports this initiative. However, the industry alone cannot take this burden. The over emphasis on affordability is a matter of concern as it could disturb the delicate balance between the price and availability. Also, several measures proposed in the draft to improve quality and GMP will have major impact on the cost of production. The pressures to reduce the prices and improve the quality at the same time will only squeeze the manufacturers' margin, impacting the availability of medicines.
Talking about the innovation and indigenization, DG Shah pointed out that the draft displays inadequate appreciation of the industry's efforts towards innovation and complete ignorance of the drug discovery process. The industry's spend on research and development has increased by more than 150% in the ten-year period from Rs 1,441 crore in 2004 to Rs 3,632 crore in 2014, according to Capitaline. A few major companies spend about 8% to 12% of their revenues in research, which is comparable to the global generic players, in spite of operating in a hostile pricing environment. The notion
that "giving brand names to generic drugs hampers real innovation" is without any basis. On the contrary, learning to build brands is a first step in the process of innovation.
Innovation needs a supporting policy environment, including protecting trademarks and promoting brands, whereas the earlier policies and the current draft suggest abolishing brands. Even in the absence of such a policy environment, the national industry has not lost sight of putting India on the global map of innovative countries. It should therefore be recognized for its efforts and risk taking.
The draft needs to recognize that research and development require lot more than mere concessional rate of customs duty. It is a high risk investment and needs returns commensurate with the risks.
The IPA compliments secretary-Department of Pharmaceutical for the very thought of creating demand for indigenously produced APIs to reduce dependence on imports. However, its implementation is a challenge. Unless all concerned are convinced of its long term benefit to the consumer and are agreeable to patients paying more today for better tomorrow, this could remain just a thought. It also observed that the outcomes of these policy initiatives will be neither in the interest of the patients nor in the interest of the industry as the industry has been facing many other challenges.
Because of the many challenges, the industry’s growth has slowed down. The domestic market has declined to mid-single digit rate and the exports have reported absolute decline. DG Shah suggested that the draft should be viewed against this background. Its disruptive proposals could further hurt the sentiments and destabilize the industry. The timing of these disruptive changes is not opportune. The IPA therefore requests that the draft policy be held in abeyance until such time as some stability is restored and the industry is ready to handle new disruptions.