Combination drugs: Units in tax-free zones at an advantage

Pharmaceutical units in tax-exempt areas like Baddi in Himachal Pradesh may soon become the only ones that can legally manufacture over 150 fixed-dose combination (FDC) medicines, which have combined sales of Rs 3,000 crore in the country.

FDCs combine two or more drugs that are normally consumed separately and therefore reduce the pill burden of patients and increase the compliance level of medication.

The business opportunity for units in tax-exempt states is the result of a two-year-old decision of the central drug regulator to stop issuing fresh manufacturing licences for a select list of FDCs whose rationality was questioned by experts.

The medicines include combinations containing commonly used drugs like paracetamol, amoxycillin and diclofinac, among others.

Since most units in these tax-free zones came up in the last three to four years, the five-year validity of the licences which they secured just before the regulator’s ban on fresh licences allows them to continue producing these medicines for at least two more years.

On the other hand, 80 per cent of the older units in other parts of the country have been compelled to stop producing these medicines after the authorities refused to renew their licences.

According to Jagdeep Singh, president, Punjab Drug Manufacturers Association, the decision of the office of the Drugs Controller General of India (DCGI) has put them at a disadvantage vis-a-vis their counterparts in the tax-exempt areas as it provides them an exclusive product range.

However, the ultimate fate of these 156 FDCs, which were among the 254 categories of FDCs that were identified as “irrational combinations” by the drug regulator, depends on the recommendations of an expert group that is looking into the “irrational” nature of these medicines. It is known that the expert group is to submit its report by 2010.