Under threat of an interim order from the Supreme Court, the Group of Ministers (GoM) tasked with framing India’s drug pricing policy finally plumbed for a market-based policy, fixing the prices of all formulations of the 348 bulk drugs in the National List of Essential Medicines 2011 by taking the weighted average price of all brands having at least one per cent or more market share by volume. The method may not be what the pharmaceutical industry hoped for, but there is some relief that the confusion will soon end.
The decision of September 27 still needs the Cabinet’s nod for approval but no one would like to come in the line of fire of the Supreme Court, which called the eight year delay a “slur on the face of all stake-holders”. This decision comes after the Court wondered if the members of the GoM were “meditating” or “deliberating” during the meetings as the letter pertaining to the deliberations did not have any details, leading the Bench to ask if the meeting was a silent one!
On other fronts as well, the wheels of policy change finally seem to be moving in India. The Government’s recent policy push which resulted in the Cabinet approving FDI in multi-brand retail, among other long overdue decisions, is good news and the pharma sector hopes it is next in line for FDI reforms.
On the IPR front, India’s regulators have so far stuck to their stance that policy must be framed to protect public health. There has been no rollback since India introduced such safeguards like Section 3d in its patent laws. In fact, countries like the Philippines, Taiwan, China and Argentina have followed India’s example.
September saw two landmark legal decisions which have earned their place in the history of the pharma industry in India, while final arguments in a third case are still being heard. Legal experts comment that these recent decisions (the Natco-Bayer case, the Cipla-Roche case) were resolved without undue postponements unlike in the past. Novartis too hopes to have a verdict in the Glivec case before year end.
But industry does have a valid grouse that the Government has been dragging its feet on other important legislature. Once the pricing policy is in place, it’s time for the authorities to put in place a policy on unfair marketing practices. On the clinical trials front, guidelines on compensation need to be framed. The draft guidelines on biotechnology (released in June this year) as well as those on stem cell research (released in March this year) too need to go to the next stage.
This criticism only serves to once again highlight the risks that the life sciences industry in India presents today. During a recent webinar hosted by Metro Atlanta Chamber and FDA Smart, with Express Pharma as the media partner, Vishal Gandhi, Managing Partner & CEO, BioRx Venture Advisors cautioned that the higher than expected pricing pressures, lack of predictable IPR policy resulting in increased risk of litigation and multiple window clearance could mar the India story for global pharma and biotech firms looking at the country for partnerships.
Will these concerns be sorted out sooner rather than later? Hopefully, the September 27 decision of the GoM will clear the table for more such decisions. The push from India’s highest judicial authority combined with an economist-Prime Minister who finally seems to have the OK from his party’s high command to forge ahead with economic reforms, irrespective of the support of alliance partners could mean that all the pieces will finally fall in place for the pharma industry. Even if these are precursors to the campaign for the 2014 elections, we promise not to quibble.
Viveka Roychowdhury
Editor
