Indian drug makers rejoice NPPA's pricing policy rollback

Indian drug makers have welcomed the National Pharmaceutical Pricing Authority's (NPPA) move to withdraw its hotly debated order on fixing prices of drugs falling outside the government's list of essential medicines.

"This is for the first time, I think, that a pharma policy has been rolled back... It is a very positive move," Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw told Business Today. "It is for the first time I am seeing that the government has reacted to the genuine concerns of the industry."

Rajeev Nannapaneni, Vice Chairman and CEO of Natco Pharma, is equally upbeat. "It is important to have a clear policy of what is under [price] control and what is not because unless you have predictability in policies it is very difficult to launch products," he says.

"At the end of the day, there has to be some reasonable amount of profit that can be made to sustain the R&D efforts... Therefore, this is positive."

However, Dr Krishna Reddy, vice chairman of the Care Group of Hospitals in Hyderabad, expressed surprise at the rollback.

"Some of these drugs, especially in anti-diabetes and cardiac care, are equally essential since the incidence of these diseases is typically higher and patients need to take medicines for all their life," he says. "Around 15 per cent of people in India are diabetic compared to, say, 0.2 per cent suffering from tuberculosis... If there is price control, the companies could still benefit through higher volume sales."

So, what next for the industry? The government should now take this forward with its mantra of "Made in India" and take measures to encourage drug manufacturing, says Mazumdar-Shaw. She says it is high time the concerns of the pharmaceutical industry are looked into. "The pharmaceutical industry face a lot of problems. We have multiple ministries regulating us. We have really no voice in any of these decisions."

Mazumdar-Shaw also points out that India has lost its lead in some important areas in pharmaceuticals. "India has been rendered into a very difficult situation because of forced pricing... Look at the example of antibiotics."

She says that, at one time, India was the global leader in semi-synthetic penicillin but with a policy that forced Indian companies to maintain a certain price level in times when China was investing in building global capacities and becoming competitive ended up making the sector unviable for Indian companies. Now, India has become dependent on China for penicillin drugs. "Today, China commands 60 per cent of the world market for some of these antibiotics," she says.

On the pricing policy, she feels patients in India get the lowest-cost generics in the world and it is for the government to procure in bulk and make it even cheaper for patients instead of killing the pharmaceutical industry in the name of poor patients.