Pharmaceutical companies in India have sought a Goods and Services Tax (GST) cut on essential medicines to ensure their affordability for people at large.
Describing the pharma industry’s wishlist for the next Union Budget 2024, Director General of the Organization of Pharmaceutical Producers of India (OPPI), Anil Matai said that import duty should also be waived off for life-saving drugs being imported, stating that no one takes medicines as a “luxury” and shouldn’t be made to pay high taxes for saving lives.
He also pitched for more incentives for innovation to drive more investment into R&D.
As per the Drugs (Prices Control) Order 2013, the government regulator National Pharmaceutical Pricing Authority (NPPA) regulates the prices of essential medicines in India . While 870 essential medicines are a part of the National List of Essential Medicines (NLEM), there was a price cap on 651 medicines in April 2023.
Terming the $200 billion size of the pharmaceutical industry as per the government’s target for 2030 as an “aspirational” ambition, Matai described it as achievable while he stressed the need for the government to address issues that can change in the regulatory environment by promoting the ease of doing business.
Batting for innovation, he said so far the focus has been on incremental innovation, and for India to move up the value chain rather than just be a volume supplier, it will have to find ways for better IP (Intellectual Property) protection.
He stated that without any IP protection, a company coming up with any disruptive innovation will lack incentives to do so. He pointed out that a company ends up spending 15-20% of its revenue on R&D, and when a new drug is developed, 10 to 12 years are spent in pre-launch activities like drug development and safety trials out of the 20 years of patent life.
With a residual shelf life of 7 to 8 years for a patent, he explained that the government needs to factor in some ROI (Return on Investment) for a company investing billions of dollars in R&D as global companies operating in India need to make the proposition attractive to their global parent companies.
Speaking on the increased visibility of news of adverse events, including deaths, due to exported drugs, he said that such incidents bring to the limelight the need to have an improved quality enforcement environment in India.
While he said there may be very few out of the 10,000 drug manufacturing units in India that don’t strictly adhere to quality standards, he called for strict action against such errant units.
Pitching for quality infrastructure at the government level in terms of drug inspectors, he reiterated that deaths of patients due to sub-standard drugs are unacceptable, and India’s image shouldn’t be allowed to take a beating.
