Nurturing Industry Needs

With the new government comes renewed hope that the new Minister of Chemicals, Petrochemicals and Fertilizers, Muthuvel Karunanidhi Azhagiri, will bring with him a fresh look at policy issues simmering on the back burner. Stalwarts from the Indian pharmaceutical industry share their wish lists with Usha Sharma

'Making good on the promise of quality healthcare' Ranjit Shahani Vice Chairman and Managing Director, Novartis The state of a country can be best judged by the state of its people in terms of health and education, two areas that remain a challenge for India. 65 percent of India's population resides in rural India with little or no access to quality healthcare. It is an irony that a significant number of people in India do not have access to medicines in a country with the largest number of US FDA approved plants outside the US. India is today knows for its skills in IT, the IT industry flourished in the backdrop of progressive policies that were specially crafted for the sector. Pharma industry in India is the next sunrise industry and on the threshold of a great opportunity. The Ministry of Chemicals, Petrochemicals and Fertilisers can play a key role in ensuring that the sector receives the right impetus to grasp this opportunity be it by way of healthcare infrastructure or by way of putting in place the right policies. One hopes that the Ministry will look to price monitoring as opposed to price control and allows market forces to decide pricing. It would certainly be a travesty of justice if we were to go back in time to an era when the majority of drugs were price controlled. In fact, pricing norms, if any, should be made more transparent and realistic. We still have some way to go before we can be proud of world class patent rights. In addition, government needs to put in place at least some minimum standards of data protection to begin with. We need to leave behind our old mindset of protectionism and look to create a pharma industry which will serve as a beacon to the rest of the world. We also need to keep the long term interests of the health of the people of India at heart. The honourable Minister of Chemicals, Petrochemicals and Fertilisers has the opportunity of a lifetime to deliver to the people of India world class healthcare and to broaden access through innovative public private partnerships. It is now up to him to make good that promise.

'Pricing policy needs to be addressed promptly' Daara B Patel Secretary General, Indian Drug Manufacturers' Association (IDMA) To ensure a progressive 'Pharmaceutical Policy' and to lessen the adverse implications of the 'Draft Policy', it would be better to give up cost based 'Price Control' completely and consider 'Monitoring Prices'. Of non-scheduled drugs, Public Private Partnership between government and industry, repealing drug price control order (DPCO) 1995 and proper interpretation of the order of the Supreme Court, etc. in implementing the Pharma Policy would be some ways to reduce the burden on the industry and at the same time, ensure continuous supply of affordable medicines. Though Pharma Policy rightly recommends monitoring of prices instead of controlling them, the policy does not envisage setting up of price monitoring cells across the country. There is no need to have that kind of a structure, as manufacturers mark single MRP on all products which sold all over the country. The DPCO has vested National Pharmaceutical Pricing Authority (NPPA) with powers to question any manufacturer on his product's printed prices and hence random sampling by NPPA would suffice. NPPA should set up cells in remote areas to ensure that all the poor patients have access to these affordable medicines. Government can with its prompt and timely actions ensure that the industry continues to produce quality affordable drugs without stoppages. These actions include gradually decontrolling all prices, except patented drugs, provide R&D support by setting up top class labs, provide Information Technology (IT) exemptions to R&D work, raise Central Consumer Protection Council (CCPC) norms and link prices to inflation index etc. Also, to ensure access to imported patented drugs, the DPCO 1995 pricing mechanism needs to be immediately revised to calculate production cost instead of landed cost to ensure that the selling price provides a more realistic figure. Other issues which require the Minister's attention are: Keeping all non-scheduled drugs out of purview of DPCO 1995 20 percent increase in prices of non-scheduled drugs annually to be allowed No suo moto reduction in prices of scheduled drugs - rupee appreciation, dollar depreciation, fall in prices of raw materials etc are all temporary phenomena

'Restructure all aspects of the Indian pharma industry' Tapan Ray Director General, Organisation of Pharmaceutical Producers of India (OPPI) I would expect the new UPA Government to have a fresh relook at the current policy, which was prepared in the last millennium and soon announce an inclusive growth oriented 'new drug policy', matching the progressive outlook of young India. Affordability: The new policy should ensure adequate availability of all 'National List of Essential Medicines' (NLEM) at affordable prices. 'Jan Aushadhi' initiative of the Department of Pharmaceuticals (DoP) should be strengthened further through public-private-partnership (PPP) initiatives and by using strong public distribution outlets like ration shops and post offices for effective rural penetration of the scheme. Considering the access arena the government should make proper use of its existing initiatives, take some new initiatives and dovetail them as follows: 'National Rural Health Mission' (NRHM): To create rural healthcare infrastructure. 'Jan Aushadhi' scheme: To extend the reach of affordable medicines to a vast majority of rural population. Simultaneously, creating innovative 'Health Insurance Schemes' for all sections of the society through PPP, like, 'Yashasvini', pioneered by Dr Devi Shetty of Bangalore and the Government of Karnataka, which is possibly the world's cheapest comprehensive Health Insurance scheme, at Rs five (11 cents) per month, for the poor farmers of the state. The new policy should plan to provide adequate fiscal incentives for R&D initiatives taken by the pharma industry of India. The new policy should play an enabling role for companies carrying out clinical studies in India not only to help them record a healthy growth, but also to attract more 'foreign direct investments' (FDI) for the country. Exports: To give greater boosts to exports Pharmexcil should be further strengthened to act as an effective nodal centre for all pharma exports, which should also undertake promotional activities to accelerate growth of pharma exports Employment generation: Recommendations to be provided in the new policy should further accelerate employment generation by the pharma industry. Contribution towards the country's economic growth: Innovative new 'drug policy' initiative of the new government should not only ensure a stimulating inclusive growth for the industry, but also help attract adequate FDI for the country.

'Putting pharma industry on a high growth trajectory' 'We have done well in spite of the Government', ask any leader in the pharma industry and this sentiment is likely to be expressed by most. While this may or may not be entirely true, the government's role in a modern economy is not only regulatory but also developmental. Now that the newly formed government is shorn of the ‘coalition compulsions’ of the past, it is time to put this knowledge based industry on a higher growth trajectory. Following are some of the suggestions to achieve this goal. Dr Ajit Dangi President and Chief Executive Officer, Danssen Consulting Price Control: For the past several decades successive governments reduced the span of price control in a phased manner with only 74 drugs under price control in DPCO 1995. This enlightened policy resulted in emergence of a vibrant and globally competitive pharma industry, unfortunately, the National Pharmaceutical Policy - 2006, reversed this positive trend and proposed to bring all the 354 essential drugs under price control. This illogical policy needs to be scrapped. The pharma industry is intensely competitive and highly fragmented with over 10,000 manufacturers. Even the market leader has less than six percent market share. Most molecules have over 20 - 100 copy brands available making price control redundant. Recently, placed 10 percent cap per year for price increase on decontrolled products is also illogical particularly when inflation had crossed 10 percent in mid 2008 and rupee has devalued over 20 percent against the dollar. We need to find an alternative model to make medicines affordable to the masses other than the rigid price control. Access to medicines: This is the most important challenge. It is unfortunate that in spite of low prices and glut of generics in the market, less than 40 percent Indians have access to essential medicines. This is largely because of lack of health infrastructure such as diagnostic facilities medical professionals' chemists, nursing homes, hospitals etc; in the rural area. This needs to be radically improved by giving appropriate incentives. Transaction costs: More than 50 percent of medicine prices are transaction costs. These include excise and import duties, VAT, Octroi distributor and retailer margins etc. We should quickly move to Goods and Service Tax (GST) removing multiplicity of taxes, which has not only cascading effect but also acts as a barrier for smooth movement of goods across the states. Central Drug Authority: Multiplicity of State FDAs has resulted in varying degree of implementation of manufacturing standards and proliferation of irrational drugs. The recommendation of Mashelkar Committee to have a Central Drug Authority on the lines of US FDA should be implemented speedily. IPR protection: While India has honoured the WTO commitment and enacted the Patent Act 2005, allowing product patents for 20 years, there are several deficiencies which need to be ironed out. The most important being narrowing of the definition of patentability only to NCEs (unless significant efficacy is proved). The definition needs to be expanded to include polymorphs, metabolites, new indications, NDDS etc. as long as these inventions are novel, non- obvious and have commercial application. To illustrate, if an Indian scientist develops an oral dosage form of insulin as against the injectable form presently available, which will revolutionise the anti diabetic therapy, will he/she get a patent? Not likely under the present law. Provision for data protection, inspite of deliberation of two committees—Satwant Reddy and Murli Manohar Joshi committees, is a disincentive to research based pharma industry. At least five years of data protection from the date of marketing approval of the new drug in India needs to be actively considered. Due to ambiguities in the Patent Act, litigation is on the increase. A dedicated Intellectual Property (IP) court on the lines of those in USA, Japan, China etc. for quick resolution of IP matters and scrapping the provision for Pre Grant Opposition will improve the quality of IPR enforcement. Another important issue is biodiversity. The benefits arising from the use need to be shared with the providers and USA must be persuaded to sign the Convention on Biological Diversity (CBD). Research and development: R&D and innovation is the life blood of pharma industry. Good IPR protection, availability of funding and scientific talent with appropriate skill set are key drivers for spurring R&D. Government's plan to develop five new National Institute of Pharmaceutical Education and Research centres (NIPERs) countrywide should be accelerated. The recently announced Rs 10, 000 crore. R&D tax free bonds every year till 2020 to fund drug discovery and DBT's Biotech Industry Partnership Programme (BIPP) with Rs 350 crore. The package will not only give fillip to R&D but will also underwrite the risk involved in drug discovery. Industry-academia partnership for drug discovery research particularly for diseases of the poor should also be similarly incentivised. Public Sector Pharma Units: While most of the pharma industry has been reasonably profitable, public sector undertakings (PSUs) like Indian Drugs and Pharmaceutical Ltd (IDPL),Hindustan Antibiotics Ltd (HAL) etc. have turned sick. The reason is incompetent management. A prestigious institute like Haffkine in Mumbai was temporarily closed down by the Maharashtra FDA for GMP non-compliance. This is a case in point rather than getting into pharma business by reviving the sick PSUs as proposed by the Ministry of Chemicals, Government should focus on creating conducive environment through positive policy intervention with proper oversight. Health insurance: Over 80 percent of India's population pay from their own pocket for medicines. This burden should be reduced by expanding the Health Insurance and successful schemes like Yashaswini, Aarogyasri etc, should be introduced countrywide. Several international health insurance companies are waiting in the wings to enter India but with 26 percent equity cap they are reluctant to do so. Increasing the cap to 49 percent as proposed will not only bring new investment in this vital sector but also the international expertise. Regulatory reforms: Regulatory agencies play an important role in development of pharma industry. India's abundant patient population, well qualified medical professionals and cost competitiveness can make India a destination of choice for clinical trials on new drugs. GCP guidelines need to be made mandatory (schedule Y) and CROs need to be audited and licensed. If proper regulations, SOPs and protocols are in place there is no reason why permission for conducting phase I studies for drugs discovered outside India cannot be granted. A multibillion dollar market is opening up for biosimilars globally. India should formulate biosimilar regulatory pathway on the lines of European Medicines Agency (EMEA) and proposed US FDA draft guidelines giving impetus to this opportunity. Patent linkage between the DCGI office and Controller of patents also needs to be addressed on priority. Many safe and effective drugs with good safety record over several years need to be de-listed from prescription drug category and well defined OTC policy needs to be formulated. The archaic rule of exemption from selling licence for villages of population under 1000 need to be scrapped and medicines for minor ailments such as cough and cold, pain, acidity, fever, skin afflictions etc should be allowed to be sold without selling license or one time registration fee. Labour reforms: Maharashtra is perhaps the only state in the country where Medical Representatives are classified as 'workmen' resulting in over 20,000 labour related disputes in labour courts. The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act (MRTU & PULP Act) needs to be repealed. Also exit policy for closing non viable units should be simplified. Finally, one often wonders why pharma industry is placed under the Ministry of Chemicals. Pharma industry the world over is gradually moving from chemistry to biology and needs a different mindset to capitalise on future opportunities. The grouping of three disparate industries; Chemicals, Fertilisers and Steel under one umbrella has often resulted in lack of focus for pharma and needs to be reviewed, most of the suggestions made above are achievable without much parliamentary intervention (except perhaps IPR protection) and is a matter of executive decision. All it requires is a strong political will as shown in signing the Nuclear Deal.

'CROs to be treated as sunrise industry' Finance Chetan Tamhankar Chief Operating Officer, SIRO Clinpharm Tax exemption available on Export Oriented Units (EOUs) till March 2010, to be extended Industry should be considered as 'sunrise' industry and granted same benefits given to IT many years back Infrastructure Uninterrupted power and water supply Appropriate investments in government hospitals especially in tier II and tier III cities Education Introduction of a course on 'Clinical Research Methodology' during 4th year of Bachelor of Pharmaceutical Sciences curriculum as well as for MBBS students Accreditation of clinical research education institutes to avoid their uncontrolled proliferation Regulatory Single window clearance system for approvals Draft guidance on paediatric and stem cell oriented clinical trials Guidance for industry over conduct and approval process for biotech; genetically and r-DNA originated molecules Clarity on the review process for new clinical trial applications by DCGI Guidance for industry from DCGI on conduct of only India - specific Phase II or III trials for molecule originated abroad Review timelines for clinical trial application, should be the same as that of earlier timelines of four weeks and six weeks Bring clarity in reporting safety reports to DCGI office e.g. submission of SUSARs, SAEs, CIOMS Design a solid review process for clinical trial proposals Issue guidelines for registration of ethics committees / IRBs

'To provide priority status to the pharma Industry' T S Jaishankar Chairman, CIPI and CII SME Task force To publicly announce officially that the India pharma products are the lowest priced in the world Divert the attention of the Consumer Councils and the general public to hospital charges, diagnostics, which form 90 percent of the patient treatment that medicine Do not overdo price control on medicines causing shortage of essential medicines Allow 300 percent Maximum Allowable Post-manufacturing Expenses (MAPE), to encourage industry to survive and produce all products as per DPCO Remove Fringe Benefit Tax (FBT) on medical representatives' allowances and overall marketing expenses of medicines. This is because medicines are under price control Consider SSI Units in par with public sector undertakings (PSUs) for supply to government institutions PSUs Instruct all to drop minimum sales criteria for participation in tenders Pharma policy should be announced within three months to have clarity for industry Accept the recommendation of the committee formed by DCGI on spurious drugs notification

'Need incentive - based regulation' M Gandhi Managing Director, UBM India Priority should be given to establish a long-term strategy for positive development of Indian pharma industry, while taking into consideration the social and economic implications. A comprehensive vision document done in consultation with all stake holders will ensure sustainable growth, thus making it one of the 'engines' of Indian economy. Pharma policies when implemented could have major political, social and economic implications both positive and negative balancing these issues while preparing the strategy document shall need wisdom and strength to unite all parties. Differentiating India from the rest of the world as a brand for quality and innovation in drug discovery and development is imperative. Regulations that provide incentives to organisations that uphold the positive image of India, while aggressively and mercilessly weeding out the 'black-sheep' is the need of the hour. This could only happen by having a transparent policy in place, implemented by highly committed and talented officials. It is vital that special emphasis is provided to all aspects of the pharma industry—bulk drugs, API's, generic, drug discovery, clinical research, bio-pharma, natural medicine, machinery and equipment, etc. Having clear technology foresight and policies facilitating the quick assimilation of new knowledge, will keep India at the forefront. The Minister should motivate the industry to invest in drug discovery, explore and develop mutually beneficial partnerships with emerging markets for growth while continuing to acquire market share from the developed world. India's ability to provide affordable and quality drugs to the world as a reliable supplier, will definitely add value in positioning brand India while retaining our historical value systems that propagate kindness and integrity.

u.sharma@expressindia.com