 Hello and welcome to NewsClick. Today we have with us Dr. Amit Sen Gupta of Jenswa Sabhiyan to speak about the draft pharmaceutical policy of 2017. The recent pharmaceutical policy which had come up, how important is it at this juncture and how does it serve the accessibility and affordability of medicines to the people? We have never maybe in the last 2 or 3 decades have had a proper pharma policy which is designed to address the issue of access. What we have are policies that try to make piecemeal changes and make piecemeal suggestions over a period of time. Now most of the earlier policies have really been largely about pricing, largely about some aspects of quality control etc. But the intersection with health because finally you cannot treat pharmaceuticals or medicines like you treat other consumer products because they are required for the health sector. And the intersection with health is never been very clear in successive pharma policies and that is why there are important issues related to health. As well as important issues related to the pharmaceutical manufacturing sector as well which require to be addressed. Having said that, I think it also needs to be underlined that the current policy draft which has been publicized for commence is grossly inadequate. It is almost an amateurish kind of an exercise drafted by people who have little knowledge of the sector and it is a very slip short way of trying to address very important issue. At least it has mentioned something that has remained on the sidelines, talked about quite openly within the industry but has not earlier come in the policy domain which is the issue of deindustrialization in the pharmaceutical sector. Now while the policy draft does talk about it, it talks about it in such a perfunctory manner that it provides no direction or guidance to the future trajectory of what the government wants to do in this sector. It is today a very serious matter that while on one hand India produces a huge amount of medicines exported also to 200 countries across the world, data shows that it is about the second or third largest producer of medicines per volume. At the same time it is all based on a dwindling manufacturing base. So what is happening in the pharmaceutical sector today is that much of the finished trucks that are produced in India are produced or manufactured from imported APIs that is what is called the active pharmaceutical ingredient which is the basic component and that is where the actual technological inputs are required. So much of the actual APIs that go into producing the finished products that are made in India are imported and a bulk of that is imported from one country which is China. Companies have stopped actually manufacturing APIs in India or reduced their API manufacturing capacity. So and this is largely in fact led by the big companies which are no more manufacturing APIs but they are importing APIs or are buying from the existing producers of API which is the small and medium sector in India not the large companies and just finishing the drugs, packaging them and selling them to the market. So they are actually working as traders rather than manufacturers. So even in the policy it speaks that this trading or which you are saying is getting API from other countries and making formulations is being taken up by other Southeast Asian countries and some day down the lane even China might catch up. So what would be the situation of Indian pharmaceutical? So that is the other danger that exists which is that today this appears to be a division of labor in the pharmaceutical market where China is producing a bulk of the APIs and India is producing the finished products from much of this from Chinese imported APIs. Now nothing prevents actually China in the coming years to also start making finished products in a in a large way because it's much more convenient for them because they are the ones who are making the API and if that happens it will be extremely difficult for the Indian pharmaceutical industry to survive in its present form because currently if you look at the pharmaceutical market the Indian market the domestic market is not growing it is not growing also primarily because most of Indian drugs that are consumed in India people buy from out of their own money it's related to the very poor investment in public health services and there is that is why a limit to the growth of the consumption of medicines in the domestic sector. Over a period of time how has the composition of the pharmaceutical industry both the indigenous as well also the missing out of a public sector manufacturing medicines changed. While acknowledging the role of the public sector in initiating production of medicines from the basic stage in India at the end of it says that maybe there is no further role of the public sector which is utter nonsense. So this position that the draft policy takes against restarting public sector manufacturing is essentially an ideological point that they are making based on the overall direction of public policy related to economics and industrialization which somehow for the reasons best known to them find no place for the public sector but in India it is IDPL and HAL both in the public sector which in the late 50s and early 60s started manufacturing medicines in India before that medicines that were sold in India were directly imported by multinational corporations they did not manufacture in India it was only after public sector manufacturing started that we see both domestic companies and even multinational corporations starting to manufacture within India that is the historic role that public sector manufacturing has done. Also in the past we used to see ratios for companies to manufacture a ratio of their production in API which is the main role. So earlier what you had was mechanisms to ensure that companies do not only sell finished products that they should be also involved in manufacturing those. So precisely to guard against the situation today you had what were called ratio parameters that is that if you were producing an X amount of medicines or you are selling X amount of medicines then you were compelled to at least manufacture Y amount of medicines in your plants in your own plants. Today what has happened is that most big companies have closed down their own plants multinational and big Indian and are buying from small and medium scale sectors through the medium of what is called loan licensing or they are importing from other countries including as we were saying China. So the policy does mention that loan licensing which is what you have raised has to be phased out in a manner what is your opinion about the. So there is a correct position that loan licensing but the only thing is that when they say phased out we do not know how long that is going to take. So the whole loan licensing system when introduced decades back it was supposed to be in existence only for three years and there have been several decades and we have continued to have that provision in place which basically means that if you want to be a big pharmaceutical player with a large presence in the market you do not need to manufacture anything you can a small company or a medium size company can license to you its existing capacity that is what that is or loan to you its existing capacity that is what that is what is meant by loan licensing. So while the policy does mention loan licensing I think the problem is that it is half hearted provision in the policy and we are not very sure how they are going to really follow up on this because there are powerful interest in the big pharma industry who are today not interested in manufacturing because today the main profits to be made is the huge margins between manufacturing cost and the selling price because so it is almost in many medicines it is the difference is 1 is to 10 the manufacturing make of a drug may cost 10 rupees and sells at 100 rupees. So because of that margin there is little interest in reducing the manufacturing cost and the manufacturers actually do not make that kind of profit it is the it is the sellers who are making that profit. So to put it crudely it is much more lucrative to be a trader or a seller in the market of the finished product than to be an actual manufacturer. Coming to the quality of medicines the policy says that bioavailability and bioequivalence tests have to be mandatory in the future to see that the medicines are of good quality what is your opinion on that. There has been an earlier government committee has which is given an opinion on on this Ranjit Rai Choudhury committee which are clearly said and that holds true even today it was a few years back that to ensure quality you do not have to insist on bioequivalence and bioavailability. Essentially bioavailability and bioequivalence are ways in which you can show that the actual presence of your drug in the body is at the same level as it is for the originator company because in India almost all manufacturers are making what are called generic medicines which are copies of the original medicine. Now in case of most medicines you do not need that you do not need to actually show by tests on human subjects that the exact levels of the chemical that is produced by the original drug is also produced by the generic drug you can do that much more cheaply by having what are called GMP norms in place good manufacturing norms. So if your process you can show that your process is good enough to produce that drug of a certain quality and equivalent to the quality of the originated drug then that is something that is that should be enough. The problem of quality in the industry is not this the problem of quality in the industry is good manufacturing practices are not adhered to there are not enough inspectors there are not enough mechanisms to ensure that these norms are actually followed and sitting on top of all that you have huge levels of corruption so you have one an underfunded regulatory agency with few laboratories too few inspectors and corruption so that is what is needed to be addressed rather than adding another layer of quality control which for most drugs is not required for a few sensitive drugs you may require bioavailability and bioequivalence kind of studies. While talking about strict quality measures it does not talk of exactly about irrational medicines which are coming up and are being given permission and thousands. See that is again related to the anarchy that prevails in the drug regulatory mechanism now this has been pointed out by umpteen committees including parliamentary committees and the government's own committees of the high prevalence of irrational medicines especially combinations meaning that these are medicines which are unscientific do not have any medical relevance in some cases they can be actually harmful we know that we know that there are something like almost a hundred thousand different formulations produced by companies most of them can be weeded out and that would actually ease the various procedures of drug regulation but unfortunately as you are correctly pointing out this policy does not really address how that is going to be done how you can have mechanisms in place that can do this periodically and thereby almost misses this whole area that requires attention extending it to the generic medicines argument prime minister of India had some time back even told that every doctor in the country needs to compulsorily prescribe generic medicine which is the chemical name but there doesn't seem to be and they have specified in the policy that it is restricted to the public sector and also they don't seem to be any regulatory mechanisms for this see contrary to some beliefs the prime minister's pronouncement itself does not become implementable just because the prime minister has pronounced it unfortunately even if we on or others may believe so and one of the prime examples is the declaration on generic medicines now the concept of generic medicines that is using the scientific name rather than the brand name and doctors are writing prescriptions is a correct concept is a scientific concept but for that to actually be implemented that notion to be implemented you need mechanisms on the ground including for example the availability of medicines that are sold in generic names now the problem is for many doctors ethical doctors if they write in generic names that medicine will not be available in the shops because companies do not produce medicines by generic names and why don't they produce medicines by generic names because the whole business model of the pharmaceutical industry in India is built around unethical promotion that it doesn't matter what you're producing what matters is how much money you putting into promotion in order to persuade doctors to write your drugs and in order for you to do that you need your own brand it is only then that your promotional avenues will work there has been also criticism that the research and development and also about patents and how the flexibilities which India has or any other country has to deal with the patents has not been addressed yeah so again it has been only I think in a couple of lines it has been mentioned but the main issue is that we are now seeing a lot of new medicines especially medicines for chronic diseases like cancers which are being introduced in the global market with under patent protection but because we changed our law in 2005 we can't our companies cannot automatically start producing them but to address that we have provisions in our in our patent act which can allow Indian companies to produce patented medicines in India provided the government issues what are called compulsory licenses now there are maybe almost a hundred new drugs of varying use value which have been introduced in the last decade since we changed our patent law but we have only issued one compulsory license so clearly there is both on the side of the government there is a reluctance to issue a compulsory license when there is a public health need and this is borne out by various pronouncements of the government that is reflected in the policy that it does not in with any seriousness talk about how the health safeguards including compulsory license in the pharmaceutical policy drop in our Indian patent act will be actually implemented to allow better access to new medicines in India in the context of using flexibilities and rnd India is usually seen as very vocal in the global scenario you know other countries even look up to India but the situation when you see and India even speaks about flexibilities in forums like wh on a very regular basis but when you see it in the other way when when it comes to the national policies there seems to be a dichotomy yes because what we are seeing now is a shift from the earlier stance of the 1990s when India used to say that we have been forced to agree to a patent regime that allows for product patents to now say and that is reflected in various policies related to patents to now saying that patents are good for us so that is a shift that is reflected in policy as well the extreme reluctance to use the provisions of the Indian patent act to break patents for new medicines and make available at lower cost medicines to the people in India market based pricing had been implemented from 2012 so this doesn't seem to be any change in the way this pricing is being looked at see the battle on pricing was lost in 2012 when the shift took place from what was the earlier norm which was fixing prices based on manufacturing cost to a market based pricing right which basically means that you base your ceiling prices of regulated drugs on what the existing prices in the market are now earlier discussion clearly shows that the market is rigged the market is rigged by promotional practices right so obviously market based pricing favors the pharmaceutical industry and the ceiling prices that the national pharmaceutical pricing authority sets are in a way quite meaningless because they are already inflated by the market so unless you can talk about going back to the earlier norm of setting ceiling prices based on the manufacturing cost the discussions on pricing are in a way infractuous in fact if you look at the draft policy in the substantive part half of the discussion is on various things that the NPPA is going to do the pricing authority is going to do now all of that is actually skirmishes on the fringes because the main battle which was about shift from the cost based pricing to market based pricing was decided upon in 2012 so it's a it's in a way smoke screen trying to justify that we are doing something to regulate prices when actually you are not so in fact there have been pronouncements concurrently that over a period the government will no more set ceiling prices but will only monitor the market so a further sort of giving up to the virtues of the market to set prices is what we are moving towards and this policy also in a way is designed to try to move towards that kind of a situation and that is something that the pharmaceutical industry will be very happy with if you really look at the reactions to the draft policy the pharma industry is quite happy with this policy because it's a no policy it's a non policy there is nothing there is no meat in the suggestions nothing that is implementable and so things will continue as they are so basically earlier this year we just had national health policy does any of the can you draw any parallels between both of these most of I mean both policies in in in the sense are one designed to continue the reliance on the market to set prices to set access and reduce the level at which the government intervenes that's basically what I would say would be common to both so this is what was the discussion on draft pharmaceutical policy thank you Dr. Amit Sen Gupta for joining us