Indian pharma is weakened by imports
Controlling healthcare costs requires ensuring that drugs are affordable, particularly in India where in 2021, out-of-pocket medical expenses accounted for roughly 47.1% of total medical expenditures. The Drugs Price Control Order, 2013 attempts to control the cost of currently available medications; nonetheless, it would be preferable to create a competitive atmosphere for essential medications by encouraging domestic manufacture.
Increasing Import
But the government has launched two programs to import goods to suit domestic needs, which would put a brake on domestic industry growth.
- The first was an order from the Department of Expenditure (DoE) allowing the Ministry of Health to purchase 120 medications through international tenders in order to supply government programs within the Union. Several of the best-selling anti-diabetic and anti-cancer medications are on this list. In India, the businesses who sell these medications currently hold a stranglehold on the market, partly because of governmental obstacles, patent protection, or both. Furthermore, the DoE order specifies a certain brand that must be purchased for more than 40 of these 120 medications, suggesting that foreign businesses' exclusive control would be strengthened.
- Second, in an apparent attempt to lower costs, the 2024–25 Union Budget suggested eliminating the 10-12% customs fee on three cancer medications sold by AstraZeneca. Considering the exorbitant cost of certain medications, the suggested decrease in import duties would not significantly impact their affordability.
Reduce the Incentives for Home Producers
These actions might significantly undermine domestic producers' incentives, increasing the nation's reliance on imports. More significantly, they might strengthen the two entry barriers that the domestic business is already facing: the system of product patents and the rules governing the marketing approval of biotherapeutics.
Two Obstacles to Entry
- Patent Protection: Since most new medications are covered by patents, Indian businesses are unable to create reasonably priced biosimilars or generic alternatives.
- Regulatory Guideline: In the meantime, domestic producers may suffer as a result of regulatory guidelines that place time- and money-consuming requirements on getting biosimilars approved for marketing.
Government in Action
Proactive government action, however, can remove both of these entry hurdles.
The Patent Act: To encourage domestic manufacturing, a number of public interest measures under the Patent Act may be used. To ease the burden on domestic enterprises, appropriate modifications might be made to the regulatory rules pertaining to the marketing clearance of bio-therapeutics.
According to Section 83 of the Patents Act, patents are not granted merely to allow patentees to enjoy a monopoly for the importation of the patented article. Rather, they are granted to encourage inventions and to ensure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. Additionally, it says, "The purpose of patents is to enable the public to benefit from patented inventions at reasonably affordable prices." These core claims are upheld by substantive provisions, which guarantee patent holders their rights under the Act but prohibit them from acting in a way that is against the public interest.
Compulsory Licences: Any company wanting to manufacture a patented drug in India may be awarded a compulsory licence (CL) if the medicine is "not available to the public at a reasonably affordable price." The best way to guarantee that medications are affordable is to issue a CL, although this has only been done once. At that time, the original manufacturer was asking for around three lakhs for a medication. An Indian business created for ₹8,000 using CL. The Patent Office hasn't granted a CL for any other medication, despite the high cost of medications. Even in the midst of the COVID-19 outbreak, the administration was against providing CL. This stands in sharp contrast to the U.S. government's position, which during the epidemic authorized licenses on a number of patents.
Government-use licences may also be granted under the terms of India's Patents Act. "Patents granted do not in any way prohibit Central government from taking measures to protect public health," according to Section 100. This section's provisions permit the issuance of government-use licenses to support the home manufacturing of generic versions of patented medications.
recommendations for biosimilars
In addition to being out of date, the requirements for biosimilar marketing approval in India are resource- and time-intensive. For example, the existing criteria mandate animal studies, which are no longer required even in industrialized nations like the U.S. and the EU that have strict regulatory standards.
Furthermore, clinical trial requirements are seen as an exception rather than a rule in the WHO and U.K. recommendations for biosimilar marketing approval, whereas they remain necessary in the Indian guidelines. These specifications put Indian producers up against yet another obstacle.
"Time and resource savings from eliminating these duplicative requirements could have a meaningful impact on patient access," the International Generic and Biosimilar Medicines Association said in a recent press release.
The Parliament's orders to increase access and cost of medicines through domestic manufacturing through the use of the Patents Act's provisions are undermined by the planned duty waiver on cancer medications and worldwide tendering for crucial medicines.
In summary
Dependence on imports may cause the pharmaceutical business to become less vibrant and less important. It is imperative that the government reconsider its recent actions, but even more so, it must adjust its policies to foster the expansion of the homegrown pharmaceutical sector.
