Draft pharma policy: Old wine in a new bottle?

The Draft Pharma Policy 2017 which was released for comments in mid-August, has an ambitious intent: to make drug pricing ‘more poor oriented while retaining its industry friendliness’. Health activists point out that the intent to balance the needs of the poor and the private sector can never be realised as long as the Department of Pharmaceuticals (DoP) crafts the pharma policy, because the DoP’s primary mandate is not patient healthcare but the health of the pharma sector. Industry too has panned the Draft. It has been dubbed ‘a bunch of Stalinist contradictions’ as well as being ‘more a product of perceptions than evidence’. Is this a case of old wine in a new bottle? A meeting organised by the DoP on August 30, where various Ministries are expected to present relevant aspects of the policy, is sure to be a stormy one.

The perennial tug of war between the Health Ministry and the Fertilizers and Chemicals Ministry once again promises to take centre stage as they each wrest for control of the DoP, which is currently placed under the latter. While the National List of Essential Medicines has been prepared so far by the Health ministry, the Draft Pharma Policy 2017 proposes that this duty be handed over to the DoP. The health ministry has strongly objected to the proposal that ‘all the regulators/ commissions pertaining to pharma industries/sector will be brought within the ambit of one department.’

The draft policy is sure to go through many revisions, and one hopes that middle ground will be found. For instance, the draft policy recommends that a  ‘one company – one drug – one brand name – one price’ stance which is impractical as many companies use the same molecule in different formulations for different therapeutic areas.

Similarly, the draft policy intends to phase out the practice of loan licensing, except in biopharma, by propagating a ‘one manufacturer, one salt, one brand name and one price’ mandate. This could hit the margins of both pharma MNCs, who would lose a cost effective manufacturing option, as well as SME manufacturers, for whom this is a major source of revenue.

The positives include the thumbs up for e-pharmacies, (of course with adequate safeguards), and advocating skilling programmes for pharmacists. Against the backdrop of China’s recent aggressive moves on the border and the impact on API supplies, the draft policy proposes that formulations produced from indigenously produced API and its intermediates be given preference in government procurements. Moreover, such formulations would be out of price control for five years and, after that, prices would be linked to indigenous content of the formulations.

On the R&D front, the government proposes to allow a concessional rate of customs duty of 0 to 5 per cent on import of specified goods and services required for R&D in pharma industry. All novel drug delivery systems (NDDS) would be considered as ‘new drugs’, unless certified otherwise by the licensing authority. But isn’t this too little, too late? Are these sops enough to incentivise the huge cost of long gestation R&D?

Also, while the Drugs Prices Control Order, (DPCO) to be implemented by the National Pharmaceutical Pricing Authority (NPPA) will apply to off patent medicines only, the threat of compulsory licensing will still apply to ‘in-patent’ medicines. Will this threat act as a brake on R&D into innovative medicines?

On a slightly more positive note, experts have pointed out that this is perhaps the first pharma policy which also attaches some importance to quality. The government proposed to ensure that World Health Organisation’s Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP) are adopted by all manufacturing units. As a first step, all national/ central government level procurements as well as the state government level procurements done out of National Health Mission funds would be mandatorily from GMP and GLP compliant manufacturing units. SSIs would be given incentives to upgrade. Given the planned roll out and scale up of Jan Aushadi stores, as well as the huge procurement budgets of PSUs like the railways, armed forces, etc this mandate should be a huge incentive for pharma companies to upgrade their quality standards. The proposal to shorten and standardise the approval process of the Central or State drug regulator to within three months, extendable by another three months, too will be very welcome, provided of course that the regulator delivers on this promise. The Draft Pharma Policy 2017 also proposes to crack down on trade margins, and make the code for pharma marketing practices, which is at present voluntary, mandatory.

These are all worthy intentions, but as I’ve said before, in relation to previous policies, intent is one thing, implementation quite another story. And once again, the emphasis is on cost, not quality and access of medicines. Let us hope that the final Pharma Policy 2017 will be more realistic and not a hurried attempt to cross off one more promise on the checklist for the 2019 general elections.