As part of an exercise to repeal the drug policy of 1994 that is in force at present, government of India released a new policy draft in 2002 after a gap of eleven years, followed by another draft in 2006. However neither of them could take off due to protracted litigations in various courts. Now after long drawn legal battle, a new National Pharmaceutical Policy is in its final stages of review before a fourteen member union ministerial panel and is likely to be promulgated soon. Formulation of a new policy has been necessitated due to several developments like the introduction of product patent regime in pharmaceuticals with effect from January 2005 in place of the erstwhile process patent regime as a result of India becoming a signatory to the WTO and TRIPS agreements. Some of the main concerns to be addressed by the new Pharmaceutical Policy pertain to accessibility and affordability of medicines by the common man particularly the vast segment of poor population, instituting standards of quality, strengthening the fragmented regulatory system, sustaining growth of generic drugs (drugs sold under their chemical names rather than brand names) and meeting the challenge of product patent regime besides price regulation of the essential medicines. The main part of the new draft policy seeks to bring a revamped drug regulatory system both at the Centre and the States. An independent and autonomous body by the name of National Drug Authority (NDA) would be constituted in place of the present Central Drugs Standard Control Organisation (CDSCO). Several of the existing provisions of the Drugs and Cosmetics Act, 1940 would be amended to make the penalties more deterrent for various offences and in particular for spurious and sub-standard drugs. In the long run the proposal of merger of National Pharmaceutical Pricing Authority (NPPA) and NDA would be considered in the form of National Authority on Drugs and Therapeutics (NADT) that will lead to an integrated regulatory system in the country.
Drug pricing and drug safety are other two areas where frequent violations are taking place as there is no integrated machinery to suitably monitor these activities. Amidst reports suggesting that the pharma companies are fixing astronomical prices for essential medicines making them out of reach of the predominantly poor people, Supreme Court of India ruled in March, 2003 that the prices of life-saving and essential drugs be kept under government control. Accordingly govt. prepared a National List of Essential Medicines (NLEM) comprising of 354 drugs that were initially proposed to be brought under government price control. However due to stiff opposition from industrial sector, the price control has ultimately boiled down to only 200 drugs. Still price control to this extent is likely to bring down the sky rocketing prices of some crucial life-saving drugs. There are several cases pending in various courts against all the top pharmaceutical companies for overcharging the consumer. The government has not been successful in recovering these overcharged amounts estimated to be several hundreds of crores of rupees because of the inadequacy of the current enforcement machinery and due to the fact that at present only 74 drugs fall under govt. price control mechanism. For remaining drugs, prices are fixed by the pharmaceutical companies in accordance with well-established norms and formulae.
For making available anti-cancer and anti-HIV/AIDS drugs at reasonable prices to a much larger section of the population, government would evolve a public–private partnership programme with the concerned manufacturers and cancer hospitals. At any given point of time there are about 20 to 25 lac people suffering from cancer in India and as many as 5.1 million people are affected by HIV/AIDS, about 85% of the South Asian total. Most of these patients are unable to afford the cost of expensive anti-cancer and antiretroviral (AIDS) drugs. Government would completely exempt anti-cancer and antiretroviral drugs from all types of central taxes - excise duty, import duty etc and the states would also be asked to exempt these medicines from all types of state and local levies. Industry and trade would be asked to reduce their margins – both profit and trade margins to the barest minimum level and all these benefits would be passed on to the consumers. Drugs for other life threatening diseases requiring life long treatment would also be identified and brought under the public-private partnership model. Further it has been decided to reduce the excise duty on all pharmaceutical products from 16% to 8%. This step is likely to reduce prices of medicines. Since last year, all medicines are required to have a label declaration of retail sale price in the form of MRP “inclusive of all taxes”. From the consumer’s point of view this step was most desirable. A new Drug Price Control Order (DPCO) replacing the existing DPCO 1995 would be issued under the Essential Commodities Act, 1955. In order to exercise more effective monitoring and control of the prices of drugs, a new Act to replace the existing system of Drug Price Control Orders would be enacted by the name of Drugs and Therapeutics Regulation Act (DATA) that will allow levying of penalties that would be graded – fines, temporary withdrawal of marketing approval, withholding of marketing approval, sealing of production facilities, compounding of offences etc. So far there was no provision for imposing fines for violation of any DPCO statutes. Further greater role and accountability of State Drug Controllers would be specifically provided under the Act.
It is seen that generally generic drugs are priced much lower than the branded ones. Presently the branded drugs dominate the market in India and there is a very small presence of the generic drugs. One of the ways to make available cheaper drugs to people at large and to the public health system could be to promote the production of generic drugs in the country. This would be done by giving preference to generic drugs during procurement and distribution of drugs through the public health system. No govt. control on price fixing of generic drugs would be specified. Further it has been agreed that the retail margins for these drugs would be kept at 35 per cent while the wholesale margins would be 15 per cent. Indian Pharmaceutical Alliance has predicted that to double the pharmaceutical exports by 2010, there is need for highly trained manpower of one thousand per annum for the next five years. As such, five more National Institutes of Pharmaceutical Education and Research would be set up on the analogy of NIPER, Mohali, Chandigarh which has been declared an institute of national importance by the Act of Parliament and is engaged in training the human resources in the field of Pharmaceutical Sciences. It is imperative for the Indian pharmaceutical industry to accelerate its efforts in Research and Development (R&D) sector. The present level of expenditure on R&D (about 5% of turnover) is much lower as compared to most of the developed countries (15 to 20%). With a view to encourage R&D in pharma sector, suitable incentives would be provided to R&D intensive pharmaceutical companies fulfilling certain conditions like Gold Standards besides giving them price benefits for the drugs under DPCO.
An annual grant of Rs. 150 crores would be allocated towards the Pharmaceutical Research and Development Support Fund (PRDSF) for utilization in funding R&D projects of research institutions and industry. Priority would be given for R&D in case of diseases that are endemic to India like malaria, tuberculosis, hepatitis-B, leishmania (kala-azar), HIV/AIDS etc. A special scheme for setting up pharmaceutical parks on the lines of Integrated Textile Parks in the next five years is also proposed. Each park would be set up in a minimum area of 250 acres for bulk and 100 acres for formulations. Besides these initiatives, new Pharmaceutical Policy seeks to make drugs available free of cost to over 26% population of the country living below poverty line through National Health Insurance Scheme, National/State/District Illness Assistance Funds and District Drug Banks. A 2% health cess is proposed to be levied on the lines of education cess to fund these schemes. At present enforcement of quality and standards in medicines is being done through the provisions contained in the Drugs and Cosmetics Act, 1940 that is administered by the Ministry of Health and Family Welfare. However the aspects relating to industrial licensing and pricing of drugs are instituted by the Ministry of Chemicals and Fertilizers. The new policy seeks to change the name of Department of Chemicals and Fertilizers so as to reflect Pharmaceuticals also. Accordingly the proposed new name is Department of Chemicals, Petrochemicals and Pharmaceuticals. An overall goal of the new policy will be to make quality medicines available at affordable prices to all sections of the society.
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