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Three challenges Modi govt faces in pharma sector

Three issues that need to be addressed by the new government in the pharma sector :

  • There is need to speed up the process of approvals for launch of new products and for permissions to undertake bioequivalence studies.
  • There is need to simplify procedures linked to the Foreign Investment Promotion Board with respect to the pharmaceutical industry. This will ensure fund raising becomes easier for pharmaceutical companies and will also ensure foreign investments can easily come into the country.
  • The government should create or encourage the setting up of industrial parks and special economic zones for the pharmaceutical industry. Given that pharmaceutical is a specialised industry where many companies have similar requirements for basic infrastructure, it is important to create industrial parks or SEZs that are customised to cater to the needs of this industry.

Indian pharma market isn’t going to be that rosy

The pharmaceutical industry today is very global, and those players who exited were primarily India-focused. Once India started following GATT and patent laws, new product approvals got harder and more challenging, and these players did not see a future in their India business and probably that is why some of them exited.

Today, leading domestic pharma companies are global in nature. They have completely diversified their portfolio whereby India does not contribute more than 30 per cent of revenues. They are trying to build a global franchise.

The Indian market will be challenging for most pharma companies as competitive intensities are very high. There will be consolidation among the smaller and mid-size players as they do not have a global platform and are completely dependent on the domestic market. At least in the near-term, growth will continue to be challenging for the Indian pharmaceutical industry.

Health & drug to remain under administrative control of two ministries despite streamlining process

Though the new government led by Narendra Modi has merged different departments and streamlined the ministries for better governance and control while reducing the flab, the control of the health and drugs will remain under two ministries, maintaining the status quo.

Sources said though there were talks of bringing the different agencies and departments related to drugs and health under one umbrella, the new regime was not in favour of disturbing the existing equations. The sources also ruled out the possibility of making the Department of Pharmaceuticals into a full-fledged ministry by bringing in other related agencies like Central Drugs Standard Control Organisation (CDSCO) under it.

The basic intention of the government is to limit the number of ministries and hence there was no chance of looking at the proposal for creating another ministry for pharmaceuticals, sources added.

There has been persistent demand for bringing different agencies and departments controlling the drug sector under the administrative control of one ministry. Now, the drug quality is maintained by the CDSCO under the Health Ministry while the drug availability and pricing were controlled by the NPPA under the Department of Pharmaceuticals (DoP) which also has the control of the drug manufacturing sector. However, DoP is under the Ministry of Chemicals and Fertilisers.

The debate over the control has been going on for a long time now. The Parliamentary Standing Committee on Chemicals and Fertilisers time and again recommended that the CDSCO be moved under the administrative control of the DoP. However, the panel attached to the Commerce Ministry strongly advocated that the DoP itself be brought under the jurisdiction of the Health Ministry. The Planning Commission had also suggested moving the DoP to the Health Ministry.

The DoP had taken up in 2009 with the Cabinet Secretariat regarding transferring the subject matter pertaining to quality control of medicines along with relevant infrastructure i.e. CDSCO to the DoP, for better coordination of the sector.

“The Committee, on occasions, found the two Departments at different wavelengths on issues of public health. In this backdrop, the Committee is of the considered opinion that since medicines/drugs are an integral aspect of public health structure, the Department of Pharmaceuticals may be subsumed within Ministry of Health and Family Welfare for effective policy formulation and monitoring of pharma sector in larger public interest,” according to the recommendations by the Standing Committee on Commerce and Industry.

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Three challenges Modi govt faces in pharma sector. Three issues that need to be...
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Indian pharma market isn’t going to be that rosy. The pharmaceutical industry...
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Health & drug to remain under administrative control of two ministries despite...
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