Health ministry sets up taskforce to address issues of pharma industry

The Union health ministry has constituted a taskforce to address issues faced by the pharmaceutical industry and evolve a long-term strategy for the sector. Prevention of takeover of domestic pharma companies by MNCs is one of the areas that the taskforce will look at.

The quantum of foreign direct of investment (FDI), the route through which it can come into the pharma industry and takeover of domestic firms by MNC giants have been among the burning issues in the recent past for the sector.

The 12-member taskforce will have members drawn from the National Pharmaceutical Pricing Authority, Department of Industry Policy and Promotion, Drugs Controller General of India and pharma industry associations. Secretary of health research, V M Katoch, will chair the committee.The taskforce has to submit its report to the government within three months.

Health Minister Ghulam Nabi Azad had recently met with drug manufacturers in Mumbai and Hyderabad, where pharma industry leaders had requested for a taskforce to prepare a long-term strategy for strengthening the drug sector in the country.

Apart from issues like clinical research, medical devices and R&D in the sector, FDI in the pharma industry has been an area of debate in the recent past. Acquisition of Indian pharmaceutical companies by multinationals could orient them away from the Indian market, thus reducing the domestic availability of drugs produced by them—this was among the many concerns raised by the Ministry of Health and Family Welfare that made the commerce ministry seek a review of the FDI policy in the pharmaceutical sector.

The health ministry advocated doing away with the automatic 100 per cent FDI approval route for the pharmaceutical industry. Foreign investment should be allowed in the pharma sector through the FIPB (Foreign Investment Promotion Board) route, it argued.

The terms of reference of the taskforce would be to evolve a policy, that would look at short, medium and long-term requirements of the pharma sector and to make India a hub for drug discovery, research and development. Also, the committee would evolve strategies to further the interests of Indian pharma industry in the light of issues related to Intellectual Property Rights and recommend strategies to capitalise the opportunity of drugs going off-patent over the next 5 years, a health ministry statement said.

The taskforce has also been mandated to evolve policy measures to assure national drugs security — promoting indigenous production of bulk drugs, preventing take over of Indian pharma industry by MNCs, drug pricing, promotion of generic drugs and recommend measures to assure adequate availability of quality generic drugs at affordable prices.

Measures to tackle the problem of spurious drugs will also be a focus area of the taskforce.

The cases of takeover of Indian pharma companies by MNCs, include Matrix Lab being bought by US-based Mylan Inc; Dabur Pharma by Singapore’s Fresenius; Ranbaxy Laboratories by Japan’s Daiichi Sankyo; Shanta Biotech by France’s Sanofi Aventis; Orchid Chemicals by US-based Hospira; and Piramal Health Care by US-based Abbot Laboratories.

The argument put forward by the ministry is that if Indian pharma giants were taken over by MNCs, they might lose interest in applying for a compulsory licence even if they were eligible, and that might threaten the regime of cheap and effective drugs in the country. Also, in the case of a public emergency, capable drug manufacturers may not be available to come forward to apply for compulsory licence and work at a reasonable cost. It said Indian pharma companies taken over by MNCs had been receiving state grants and tax concessions.