The India pharma industry which is currently valued at INR 1,20,000 crore plus has been through a rollercoaster ride in the past few years. Even though it has seen double-digit growth in the past year, after having a lean phase of single-digit growth and sometimes even de-growth, prospects for the industry are not that bright. Hasty decisions like demonetization and implementation of the Good and Services Tax (GST) had significantly impacted the growth of this sector. The industry is growing at present at around 11 percent per annum compared to a rise of 15 percent five years ago.
The government has taken various measures that had been beneficial to the end-users. It insisted on lowering the prices of medicines that include anti-cancer drugs, medical equipment and also stressed on the selling of generic medicines. Although these moves have benefitted the consumers, it has failed to make the industry happy. It argues that many steps taken by the government were unilateral and arbitrary. They have argued that while the government was controlling prices and checking irrational fixed-dose, it has not
made the investment to strengthen the drug regulatory institutions. The first term of the present government has been very severe on this segment and some measures like curbing the sale of certain fixed-dose combination drugs, price ceilings on knee-cap and stents, have been detrimental to the company.
Some measures which the Pharma Company believes were beneficial to the end-consumers, but is hurting the industry are:
• The Ministry of Health and Family Welfare in 2016 has banned 344 fixed-dose combinations (FDC) having an impact on 6,000 brands made by 100 odd companies. The industry took the matter to court but to no avail.
• The National Pharmaceutical Pricing Authority (NPAA) in February 2019 has invoked extraordinary powers “in public interest,” and brought certain anti-cancer drugs under price control through trade margin rationalization
• It is upset that while the government has not changed the list of essential drugs, it has invoked Para 19 of the Drugs (Price Control) Order, 2013 (DPCO), which gives the regulators power to control the prices of drugs
• In 2017, price caps were imposed on stents and later in the year, even on knee-caps.
• Promotion of generic medicines in government hospitals through Jan Aushadhi model
• Some of the Indian pharma industry representatives feel the government could have done much more to make a case for the value in Indian generic story, especially, when Indian companies that have been under the USFDA scanner are seeing the import alerts being lifted.
Therefore, it can be concluded that even if the government reverses some of the measures introduced, there are apprehensions around more price caps and a greater push for generic medicines. These are the questions the industry is seeking answers to. After all, if they do bring in more curbs, the sector stocks could see a fall on the bourses.
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